10 ORGANIZATIONS Organizational Behavior
I Fast track route to understanding and managing human behavior
I Covers the key areas of OB, from understanding individual and
group behavior patterns and attitudes to work to building successful organizations and improving your personal effectiveness in the workplace
I Examples and lessons from some of the world’s most successful
businesses, including Tesco, Sears, Sundaram-Clayton and The Natural Step, and ideas from the smartest thinkers including Charles Handy, Jack Wood, Edgar Schein and Shoshana Zuboff
I Includes a glossary of key concepts and a comprehensive
I Fast track route to understanding and managing human
behavior in organizations
I Covers the key areas of OB, from understanding individual
and group behavior patterns and attitudes to work to building successful organizations and improving your personal effectiveness in the workplace
I Examples and lessons from some of the world’s most
successful businesses, including Tesco, Sears, SundaramClayton and The Natural Step, and ideas from the smartest thinkers including Charles Handy, Jack Wood, Edgar Schein and Shoshana Zuboff
I Includes a glossary of key concepts and a comprehensive
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. in any form or by any means.uk or faxed to (+44) 1243 770571. UK. Designs and Patents Act 1988.Copyright Capstone Publishing 2002 The right of John Middleton to be identiﬁed as the author of this work has been asserted in accordance with the Copyright. including uploading. or transmitted. without the permission in writing of the Publisher. PO19 1UD. stored in a retrieval system. Please contact Capstone for more details on +44 (0)1865 798 623 or (fax) +44 (0)1865 240 941 or (e-mail) info@wiley-capstone. or under the terms of a license issued by the Copyright Licensing Agency. No part of this publication may be reproduced. West Sussex. W1P 9HE. Ltd. printing. professional associations and other organizations. mechanical. downloading.com All rights reserved. Requests to the Publisher should be addressed to the Permissions Department. CIP catalogue records for this book are available from the British Library and the US Library of Congress ISBN 1-84112-285-8 This title is also available in print as ISBN 1-84112-217-3 Substantial discounts on bulk quantities of ExpressExec books are available to corporations. recording or otherwise. London. Bafﬁns Lane. Designs and Patents Act 1988 First published 2002 by Capstone Publishing (a Wiley company) 8 Newtec Place Magdalen Road Oxford OX4 1RE United Kingdom http://www. except as permitted under the fair dealing provisions of the Copyright.
» e-content – PDF or XML (for licensed syndication) adding value to an intranet or Internet site. Through the ExpressExec.com and register for free key management brieﬁngs. Each of the 100 titles is available in print and electronic formats.com Website you will discover that you can access the complete resource in a number of ways: » printed books or e-books. ExpressExec enables you to grasp the key concepts behind each subject and implement the theory immediately. Share your ideas about ExpressExec and your thoughts about business today.Introduction to ExpressExec
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10.05 07.08 07.04 07.10.10.10.10.02 07.10 Introduction Deﬁnition of Terms The Evolution of Organizational Behavior The E-Dimension The Global Dimension The State of the Art Organizational Behavior in Practice Key Concepts and Thinkers Resources Ten Steps to Making it Work v 1 5 11 23 33 41 57 75 87 103 119
Frequently Asked Questions (FAQs)
Introduction to ExpressExec 07.03 07.01 07.10.06 07.10.10.10.07 07.09 07.10.
» OB is as much a practical set of tools as an area of theoretical interest.
07. » The areas on which OB focuses are individuals who will often be working within groups. and cultural anthropology.10.01
» The ﬁeld of organizational behavior (OB) draws from the behavioral science disciplines of psychology. which themselves work within organizations. social psychology.
Mass production. social psychology. attitudes and values. missions. An organization consists of people and so it is also a social system.2
‘‘Smirk all you like about the Organization Man. more than an organization chart. Some of the speciﬁc themes embraced by OB are personality theory. These are not merely areas of theoretical interest. A discussion with an underperforming team member requires an understanding of individual motivation. and so on. helping two team members to resolve a difference can involve conﬂict resolution and negotiation skills. Some OB thinkers go further and suggest that the behavior within the organization has to be viewed partly in the wider context of the outside world’s effect on the organization and its human resources. as well as all the interrelationships between them. leadership and teamwork. . The ﬁeld of organizational behavior (OB) draws primarily from the behavioral science disciplines of psychology. behavior at. OB is not a static ﬁeld. suppliers. To complicate matters further. conﬂict. and negotiation. his trade-off made possible the 30-year mortgages and college educations that the great American dream was historically made of . and strategies. motivation and learning. organizational structure and design. They underpin practical organizational activities. the old understanding is dead. dealing with colleagues. Interred with it is much of the conventional wisdom on retaining and motivating the American worker. . or customers from another country calls on a sensitivity to cultural differences. Just look at what’s happened to the world of work over the past century or so and think about how attitudes to. and expectations of work have changed. The areas on which OB focuses are individuals who will often be working within groups. running an effective meeting needs an appreciation of group dynamics. In this book. interpersonal behavior. which themselves work within organizations. objectives. group dynamics. more than a vision statement. decision-making. power. more than a set of accounts. the rise of ‘‘organization
. and cultural anthropology.’’1 New York Times staff writer Mary Williams Walsh An organization is more than a formal arrangement of functions. we will be looking at and seeking to explain human behavior within organizations.
business process re-engineering. You won’t ﬁnd answers to all the human issues that confront the modern organization. the technological explosion of the 1960s. the ‘‘war for talent’’. In this book.INTRODUCTION
man’’. as well as some practical guidance on how you might improve your personal effectiveness in the workplace. portfolio workers. personal computers. which will point you towards sources of further information that will help you explore in greater depth. outsourcing. the ascent and descent of the dot-coms. the fall of ‘‘organization man’’ amid a dramatic fall in job tenure.
.W. you’ll ﬁnd a broad overview of OB’s key themes. 6 April. M. but you should ﬁnd plenty to reinforce that well-used clich´ from many an annual e report: that a company’s most precious asset is its people. all have impacted on organizational thinking and individual behavior over the years. There’s also a section on resources. downshifting. management by objective. the decline of manufacturing. NOTE 1 Walsh. globalization. (2001) New York Times.
micro OB is a pre-occupation with the ‘‘behavior. and the behavior of groups and individuals within them. and the whole organization.’’ Different levels can be used for analyzing organizational issues.Deﬁnition of Terms
» What is organizational behavior? One deﬁnition: ‘‘The study of the structure. » Macro OB is a pre-occupation with the ‘‘organization’’ in organizational behavior.02
.’’ » Key areas of focus are individuals. functioning and performance of organizations.
07. groups.10. and the interplay between them.
and the behavior of groups and individuals within them. OB is concerned with ‘‘the study of the structure. attitudes and performance within an organizational setting. and principles from such disciplines as psychology.’’4 What emerges from these two deﬁnitions is a view of OB as: » A way of thinking » An interdisciplinary ﬁeld
.’’1 David Buchanan and Andrzej Huczynski ‘‘Organizations are a system of co-operative activities – and their co-ordination requires something intangible and personal that is largely a matter of personal relationships. who in 1970 was appointed by London Business School to the position of Chair in Organizational Behavior. functioning and performance of organizations. offer a broader deﬁnition. According to Pugh. and actions while working with groups and within the total organization. learning capabilities. The point is that human consequences depend on how organizations are designed and run. One of the earliest. sociology. and certainly one of the most succinct deﬁnitions. analyzing the external environment’s effect on the organization and its human resources.6
‘‘Organizations are social arrangements. constructed by people who can also change them. missions. values. Organizations can be repressive and stiﬂing.’’3 John Ivancevich and Michael Matteson. the ﬁrst appointment of its kind in Great Britain.’’2 Chester Barnard There are a number of deﬁnitions that we can draw on to illuminate and deepen our understanding of the concept of organizational behavior. They say that OB is about: ‘‘the study of human behavior. and cultural anthropology to learn about individual perception. in their book Organizational Behavior and Management. drawing on theory. but they can also be designed to provide opportunities for self-fulﬁllment and individual expression. comes from Derek Pugh. objectives and strategies. methods.
but not interdisciplinary. In a contribution to a book called Mastering Management. It is neither a discipline nor is it a business function. Macro OB. is ‘‘a preoccupation of those with interests in formal organizations and structural questions’’ whereas micro OB is concerned with ‘‘informal organizations and individual and small group questions. he writes as follows: ‘‘Management textbooks frequently state as fact that organizational behavior is a interdisciplinary ﬁeld. OD In deﬁning the concept of Organizational Behavior.’’ Another way of looking at it is to think of macro OB as a pre-occupation with the ‘‘organization’’ in organizational behavior and micro OB as a pre-occupation with the ‘‘behavior’’ in organizational behavior.DEFINITION OF TERMS
» » » » »
Having a distinctly humanistic outlook Performance oriented Seeing the external environment as critical Using scientiﬁc method Having an applications orientation. OB is not a coherent ﬁeld. a collection of loosely related or even unrelated streams of scholarly and not-so-scholarly research. It is in no way interdisciplinary. he says. multidisciplinary perhaps. It is a general area that encompasses thinking and research from numerous disciplines and subdisciplines . . Organizational behavior is in reality a hodgepodge of various subjects. OB VS. it is useful to acknowledge that a similar
. . And that makes it an anomalous area of management study. Jack Wood is a professor of Organizational Behavior at IMD/Lausanne. which has been around since the 1960s. It is not.’’5 In an effort to reduce the complexity and breadth of organizational behavior. Wood makes a useful distinction between what he calls macro OB and micro OB.
Not everybody is convinced that OB represents a coherent ﬁeld.
» They just don’t have the brains for the job (that is.’ using behavioral-science knowledge. organization-wide. and managed from the top.
Let’s take a quick example. One of the most widely-used deﬁnitions of OD appears in a 1969 book by Richard Beckhard. namely: 1 2 3 4 5 6 7 8 Individual Team Intergroup Organizational Interorganizational Societal International Global. He proposes eight. the problem lies at the Individual level). but who is underperforming – how might you account for their lower than expected level of performance? Depending on how you viewed that individual and who you listened to.’’ OB and OD started out from different bases – with OB focusing on behavior within companies and OD concentrating on processes – but over the years their territories have overlapped to the extent that many people now treat the two terms as virtually interchangeable. Say there was a new member of your team at work who attended the corporate induction program. through planned interventions in the organization’s ‘processes. here are some of the reasons you might come up with.
. to increase organizational effectiveness and health.8
term – Organization Development (OD for short) – has been around for just as long.6 He writes that OD: ‘‘is an effort that is planned. He suggests that different levels of analysis can be applied when examining the signiﬁcance of an organizational issue. LEVELS OF ANALYSIS Wood offers a very useful model for exploring behavioral events.
Trying to change people by sending them on a training course is simpler than changing structures or upgrading technology. PULLING IT ALL TOGETHER Organizational Behavior is characterized by a view that organizations can be best explored by approaching them from a range of different
. This is often particularly true of external consultants brought in to perform a ‘‘quick ﬁx. a deeper understanding of its causes can be gained. However. And so on. maybe you need to ask yourself whether it truly was their fault. In an organization. intergroup. » The company’s training budget has been slashed (which is an Organizational issue). inaccurate.DEFINITION OF TERMS
» Their colleagues are not being supportive (in which case this is a Team level problem). » As a general principle. and often prefer. any organizational problem can be usefully analyzed at ever-higher levels of abstraction. As a result. such explanations are often too simplistic. It also affects the actions that we take. and then behave accordingly. or incomplete. So in future. and organizational levels. explanations at the individual level of behavior. inappropriate intervention at the wrong level can make a problem worse rather than better. the tools needed to tackle the problem can be chosen more accurately. before you blame a member of staff for mixing up a customer’s order. Why does this matter? The point is that the level of explanation that we choose determines our view of the causes of an event or problem. By considering a problem progressively at the individual. Looking at a problem systemically will always yield a better understanding than simply leaping in with ﬁxed preconceptions. and applied more effectively. » The induction program prepared by the Training department was of poor quality on this occasion (indicating an Intergroup problem). group. Here are three further points to consider: » People tend to pick their favorite level of analysis to explain events.’’ » People are most familiar with. and the solutions that we employ.
Irwin. D. (eds.’’ this is also its greatest source of strength.10
perspectives. (1998) Organizational Behaviour and Management. & Huczynski. J. Although this can lead commentators like Jack Wood to describe OB as a ‘‘hodgepodge. T. (1997) Organizational Behaviour: An Introductory Text. 4 Ivancevich. (1969) Organization Development: Strategies and Models. 2 Barnard. so there is no one best perspective from which a total understanding of organizations can be gained. MA. D. London. Addison-Wesley. A. & Bickerstaffe. MA. 3rd edn. 3 Pugh. (1971) Organization Theory: Selected Readings. 3rd edn. (1997) in Dickson. Penguin. Harmondsworth. & Matteson. Make the right choice and OB will deliver. C.) Mastering Management: The Deﬁnitive Guide to the Foundations and Frontiers of Finance. 5 Wood. (1938) Functions of the Executive. OB draws its strength from its richness and variety of perspectives. G.I. of course. M. Just as there is no one best way to run and organize a business. FT/Pitman Publishing. 6 Beckhard. Chicago and London. Prentice Hall. R. Harvard University Press. Reading. NOTES 1 Buchanan. is to detect which particular approach to a given organizational issue might best suit your particular company with its unique culture and at a speciﬁc moment in its corporate history. J. Cambridge. The trick of it. London.
10. A brief history of organizational theory.03
. The Human Relations Movement. 1950 to the present day.
07. Landmark publications on Organizational Behaviour.The Evolution of Organizational Behavior
» » » » » » Henry Fayol’s principles of management. Scientiﬁc management: Frederick Taylor.
what follows is an impressionistic cherry-pick of some key themes.
. power.3 for example. Fayol deﬁned the nature and working patterns of the twentieth-century organization in his book.’’2 D. In it. OB is a big subject which does not lend itself to a potted-history approach. group dynamics. interpersonal behavior. And this represents just a selection. weighs in at over 900 pages. attitudes and values. the lack of real communication. leadership and teamwork. he laid down what he called 14 principles of management. and negotiation. a mining engineer and manager by profession. Against this backdrop. many feel that the issue isn’t who you are in the structure but what you want to get accomplished. With new technology diffusing information widely. organizational structure and design. one of the ﬁrst people to capture on paper the processes and practices of organizations was Henri Fayol (1841–1925). the delays in making decisions and taking actions. decision-making. General and Industrial Management. Henri Fayol and the ﬁrst principles of management The roots of modern-day organizations can be traced back at least 2000 years to models of Chinese military hierarchy. His need as an animal to avoid pain and his need as a human to grow psychologically’’1 Frederick Herzberg ‘‘The hierarchy is under siege because it’s increasingly inefﬁcient and many of the most effective workers in our companies are sick of it. They’re tired of the rituals. some of the speciﬁc themes embraced by Organizational Behavior are: personality theory. published in 1916. However. conﬂict. motivation and learning. Quinn Mills A BRIEF HISTORY OF ORGANIZATIONAL BEHAVIOR – THE IMPOSSIBLE DREAM As mentioned before. Most guides to the topic are substantial – Buchanan and Huczynski’s introductory text.12
‘‘Man has two sets of needs.
5 Unity of direction: a group of activities concerned with a single objective should be co-ordinated by a single plan under one head. encourage effort. 7 Remuneration of personnel: this may be achieved by various methods but it should be fair. but sideways communication between those of equivalent rank in different departments can be desirable so long as superiors are kept informed. order. clear and fair arguments. such as size and the capabilities of the personnel. 2 Authority and responsibility: authority is the right to give orders and entails enforcing them with rewards and penalties. an employee should receive orders from one superior only. 3 Discipline: this is essential for the smooth running of business and is dependent on good leadership.THE EVOLUTION OF ORGANIZATIONAL BEHAVIOR
HENRY FAYOL’S 14 PRINCIPLES OF MANAGEMENT 1 Division of work: tasks should be divided up with employees specializing in a limited set of tasks so that expertise is developed and productivity increased. 4 Unity of command: for any action whatsoever. discipline.
. people must be suited to their posts so there must be careful organization of work and selection of personnel. 6 Subordination of individual interest to general interest: individual or group goals must not be allowed to override those of the business. and not lead to overpayment. and the judicious application of penalties. 10 Order: both materials and personnel must always be in their proper place. and stability are threatened. 9 Scalar chain (line of authority): communications should normally ﬂow up and down the line of authority running from the top to the bottom of the organization. 8 Centralization: the extent to which orders should be issued only from the top of the organization is a problem which should take into account its characteristics. authority should be matched with corresponding responsibility. otherwise authority.
14 Esprit de corps: efforts must be made to promote harmony within the organization and prevent dissension and divisiveness. Many practicing managers.
In deﬁning the core principles governing how organizations worked and the contribution of management to that process. 12 Stability of tenure of personnel: rapid turnover of personnel should be avoided because of the time required for the development of expertise. Peter Drucker. Fayol in effect laid down a blueprint that has shaped organization thinking for a century. Fayol believed.
The management function.14
11 Equity: personnel must be treated with kindness and justice. rates him alongside Freud and Darwin as a maker of the modern world. 13 Initiative: all employees should be encouraged to exercise initiative within limits imposed by the requirements of authority and discipline. organizing. for example. Taylor is often described as the world’s ﬁrst efﬁciency expert and ‘‘the father of scientiﬁc management. Fayol was also one of the ﬁrst people to characterize a commercial organization’s activities into its basic components. Frederick Taylor and the school of scientiﬁc management Frederick W. co-ordinating and controlling. He suggested that organizations could be sub-divided into six main areas of activity: » » » » » » technical commercial ﬁnancial security accounting management. commanding. would identify similar elements as the core of their activities. aged 59 – Taylor’s inﬂuence on the twentieth century is unquestionable. even today. consisted of planning.’’ Although he lived through little of it – he died in 1915.
Of course. new organizational functions like personnel and quality control were created.
The Human Relations Movement Because the industrialists of the early decades of the twentieth century followed Taylor’s lead and put the emphasis on efﬁciency. it was some years before any signiﬁcant attention was paid to the needs and motivations of that other major factor involved in the work process – the workers. 5 Monitor worker performance to ensure that appropriate work procedures are followed and that appropriate results are achieved. the effect was to remove human variability. The results were dramatic. assign the worker’s task accordingly. His scientiﬁc approach called for detailed observation and measurement of even the most routine work. in breaking down each task to its smallest unit to ﬁnd what Taylor called ‘‘the one best way’’ to do each job. 4 Train the worker to do the work efﬁciently. He advocated the use of time-and-motion study as a means of standardizing work activities. One of the early pioneers of a view that actually people were central to the world of business was Mary Parker Follett (1868–1933). 2 Use scientiﬁc methods to determine the most efﬁcient way of doing work. leaving the workers with the task of implementation. As time went by.THE EVOLUTION OF ORGANIZATIONAL BEHAVIOR
Taylor was one of the ﬁrst to attempt to systematically analyze human behavior at work. managers should do all the thinking relating to the planning and design of work. And so Taylor lay the ground for the mass production techniques that dominated management thinking in the ﬁrst half of the twentieth century. specifying the precise way in which the work is to be done.
. with productivity increasing signiﬁcantly. to ﬁnd the optimum mode of performance. 3 Select the best person to perform the job thus designed. SCIENTIFIC MANAGEMENT: TAYLOR’S FIVE SIMPLE PRINCIPLES 1 Shift all responsibility for the organization of work from the worker to the manager.
Treat people with respect and bear their needs and interests in mind. With these seeds sown by the theorists. 7 Managers need strong social skills. HUMAN RELATIONS MOVEMENT: SOME OPERATING PRINCIPLES 1 Organizations are social – and not just economic – systems.
. her views were largely ignored at the time by the business world. though. A number of people setting up businesses in the 1930s – people like Bill Hewlett and Dave Packard of Hewlett Packard. this Movement embodied the thinking of many who were concerned at the apparent disregard shown to workers by Taylor’s one best way. and who felt that. 4 Job roles are more complex than job descriptions and time-andmotion studies would suggest. 2 People are motivated by many needs. there was a better way – one which acknowledged people as capable of a much more creative contribution to the work process than Taylorism allowed. not just technical skills. Treat them as production fodder. an increasing number of practitioners began to come on board. and they typically make a better contribution. and one which set out to create a more open and trusting work environment. Increasingly. 5 There is no particular correlation between individual and organizational needs. and they park their brains outside before walking through the gates of the company and into work. 3 The informal work group is a major inﬂuence on the attitudes and performance of individual workers. criticism of scientiﬁc management mounted. not just ﬁnancial reward. Elton Mayo was just one on those who thought Taylor’s ideas were dehumanizing and alienating.16
Although she has achieved an almost legendary status since her death. for instance – began to realize that the nature of the relationship between a company and its workforce impacts explicitly on the quality of contribution that individuals make. actually. during the 1930s. Although not formally constituted. Mayo was an integral part of the Human Relations Movement. 6 Job satisfaction will lead to higher job productivity and this is a more socially beneﬁcial approach than worker coercion.
Peter Senge and others on learning. That said.THE EVOLUTION OF ORGANIZATIONAL BEHAVIOR
The slow-growing realization on the part of some organizations that extracting the optimal performance out of people required a more subtle understanding of the human heart and mind inevitably led to the creation of companies with a very different look and feel from the efﬁciency-obsessed Taylorist companies against which they were a reaction. there is now an emerging view that perhaps there may be a third way – one which combines the best elements of scientiﬁc management and human relations. Douglas McGregor’s Theory X and Theory Y. the last 50 years have been about deepening our understanding of those two major schools of thought – Taylorism’s efﬁciency-centric view of organizations versus the people-centric view of the Human Relations supporters. But at least now there was an alternative. Meredith Belbin and others on teams.4
. Dickensian cultures. 1950 to the present day To a great extent. been many signiﬁcant contributions to thinking about organizational behavior over the years – Abraham Maslow on human behavior and motivation. and in places like a good number of call centers. Not that Taylorism was vanquished – arguably it retains a strong presence to this day in phenomena like business process reengineering. Quite what an organization embracing this third way would look like is up for conjecture. Compare Henry Fayol’s 14 principles of management (above) with the following list featured by Charles Leadbeater and Kate Oakley in their recent pamphlet called The Independents: Britain’s New Cultural Entrepreneurs. But at the time of writing. and so on (see the list of inﬂuential publications below). There is currently some quite interesting work going on in some call centers to bring a more human face to their efﬁciency-obsessed. Edgar Schein on culture. there is no obvious best-practice organization that has achieved this melding of approaches. of course. But the fundamental battle-lines drawn up in the ﬁrst half of the twentieth century remain in place. There have. For now. the best way to characterize how much things have changed over the past century is to bring matters down to an individual level.
You’re unlikely to make it ﬁrst time around. 4 Have an intuition and a feel for where the market is headed. It will come unstuck because it’s too inﬂexible. Buy top-of-the-range computers but put them on second-hand desks. For example. 3 Don’t have a plan. Technology is moving so fast it’s easy to be either too early or too late. don’t wallow in it. nobody else will. 8 Make work fun. thereby attracting huge stock market valuations. Leadbeater and
. The contrast between the two is very marked. Necessity is the mother of invention. 14 Take a holiday in Silicon Valley. If you are doing what everyone else is doing. Be ready to split with your partners – often your best friends – when the business faces a crisis or a turning point. by creating something that can be given away in a global market.18
HOW TO MAKE IT AS AN INDEPENDENT 1 Be prepared to have several goes. 12 Create products that can become ubiquitous quickly. 6 Be passionate. At the outset only passion will persuade other people to back you. 5 Be brave enough to be distinctive. You may not be able to pay them much to start with so give them shares. 13 Don’t aim to become the next Bill Gates. Aim to get bought out by him. 11 Don’t be sentimental. people will not be creative. you’re in the wrong business. Adapt and change with the consumers. and the underlying assumptions about the nature of work even more so. 7 Keep your business lean. 9 Give your employees a stake in the business. If it stops being fun. To start with. Learn from failure. You will be convinced anyone is capable of anything. a business will only be sustained by a band of believers. 2 Timing is critical. not luxury. If you don’t believe in what you are doing. 10 Pick partners who are as committed as you.
1 Date 1900 onwards
A brief history of organizational theory. and controlling performance.Table 3. commanding employees. etc. specialization of work) Machine metaphor Principles of management: Henri Fayol Scientiﬁc management Job design.
Speed of change
School of thought
THE EVOLUTION OF ORGANIZATIONAL BEHAVIOR
Classical management theory (focused on planning. Herzberg. coordinating activities. time and motion: Frederick Taylor Bureaucracy: Max Weber Rational school of human behavior Human Relations school of management (focused on the importance of the attitudes and feelings of workers) Organic metaphor Hawthorne effect Motivation theory (Maslow.) Importance of the working environment Non rationality Beginnings of leadership theory
1930s to 1960s
Table 3. Team-based organizations
Late 1980s onwards
Speed of change
School of thought
Faster – increasingly unstable
Very rapid change – highly unstable
Pick and mix theories Cultural metaphor (cultural web) Contingency theory Organizational life cycle Growing impact of technology Strategy and goals Matrix management Organizations in transition Learning metaphor Technological transformation Boundaryless and virtual organizations Outsourcing Horizontal organizations Systems approach Personal mastery – Senge et al.1 Date 1960s to 1980s
1 shows some of the major milestones.THE EVOLUTION OF ORGANIZATIONAL BEHAVIOR
Oakley may not be describing the world of work as we are all currently experiencing it. LANDMARK PUBLICATIONS ON ORGANIZATIONAL BEHAVIOR » 1911: Frederick Taylor: Principles of Scientiﬁc Management » 1916: Henri Fayol: General and Industrial Management » 1924: Max Weber: The Theory of Social and Economic Organization » 1933: Elton Mayo: Human Problems of an Industrial Civilization » 1938: Chester Barnard: The Functions of the Executive » 1954: Abraham Maslow: Motivation and Personality » 1956: William Whyte: The Organization Man » 1959: Frederick Herzberg: The Motivation to Work » 1960: Douglas McGregor: The Human Side of Enterprise » 1964: Robert Blake and Jane Mouton: The Managerial Grid » 1973: Henry Mintzberg: The Nature of Managerial Work » 1978: Chris Argyris and Donald Schon: Organizational Learning » 1979: Reg Revans: Action Learning » 1981: Richard Pascale and Anthony Athos: The Art of Japanese Management » 1982: Tom Peters and Bob Waterman: In Search of Excellence » 1984: Meredith Belbin: Management Teams » 1985: Edgar Schein: Organizational Culture and Leadership » 1986: Gareth Morgan: Images of Organization » 1989: Charles Handy: The Age of Unreason » 1990: Peter Senge: The Fifth Discipline » 1990: Richard Pascale: Managing on the Edge » 1993: James Champy and Mike Hammer: Re-engineering the Corporation » 1994: Jerry Porras and James Collins: Built to Last
. There is no doubt about it: we’ve come a long way. but they do articulate a mindset about work that couldn’t be further away from Fayol’s conception. Table 3.
D. New York. D. F. A. (1999) The Independents: Britain’s New Cultural Entrepreneurs. World Publishing. (1968) Work and the Nature of Man.
. Harlow. C. Cleveland. & Oakley. (1991) Rebirth of the Corporation. 3 Buchanan. Wiley. K. OH. (2001) Organizational Behavior: An Introductory Text. 4 Leadbeater. FT/Prentice Hall. & Huczynski.22
» » » » »
1995: Karl Weick: Sensemaking in Organizations 1997: Arie de Geus: The Living Company 1997: Thomas Stewart: Intellectual Capital 2000: Richard Pascale: Surﬁng the Edge of Chaos 2001: Daniel Pink: Free Agent Nation
NOTES 1 Herzberg. Demos. London. 2 Quinn Mills. 4th edn.
10. the working day.The E-Dimension
» How the Internet is changing our thinking about various aspects of organizational life. including hierarchy. » How well are we coping with technological change?
07. internal communication. and knowledge management.04
These days. the Internet is re-inventing the nature of work. Take the lightbulb. Amid everything else it is doing.’’1 Manuel Castells INTRODUCTION To note that information technology is having an impact on organizations is on a par with saying that Madonna seems to notch up the occasional column inch. Just as water quickly becomes unremarkable when you spend all your time swimming in it. so we humans have a remarkable capacity for accommodating technological change with barely a second glance. Despite those gainsayers who have noted the demise of innumerable dot-coms with a degree of malicious glee. then don’t go asking a ﬁsh.3 ‘‘the conquest of location’’. Before the invention of the electric light by Thomas Edison. though. Books and articles abound on ‘‘the death of distance’’. There’s a well known aphorism that if you want to ﬁnd out about water. if subtle. Rather. the motor car. we hit a small problem. people used to sleep an average of 10 hours a night.4 the irrelevance of size. it may well be characterized by informed bewilderment.24
‘‘The twenty-ﬁrst century will not be a dark age. impacts on the way we work and live. and so on. In terms of extent and speed of impact. the fact is that the impact of the Internet and allied technologies has already been signiﬁcant and can only increase over the coming years. Neither will it deliver to most people the bounties promised by the most extraordinary technological revolution in history.
. when it comes to assessing that impact. and so on. with one-third of people getting by on less than six hours. the Internet has outpaced all of the great disruptive technologies of the twentieth century – electricity. the subjugation of time. And yet all the major technologies have signiﬁcant. we sleep on average for just over seven hours. the telephone.2 More recently. However. There are plenty of people writing about the impact of technology at a high level. the mobile phone has gone from being the stuff of futuristic science programs to commonplace in a handful of years. There is no doubt that technology has enabled the creation of a global marketplace.
at least not in the early days. suffer from what a CEO client of mine calls ‘‘inherited incompetence. Some 50% said they would rehire between zero and 40%.’’ ‘‘The lesson: People.’’
. shape. and size of their organizations. expressed conﬁdence in the leadership capabilities of their peers within their organizations. and was gone by 1999. went public in 1995. prompted powerful companies (notably Microsoft) to shift strategies. moreover. in short. and connections that they could bring to their next project. and equipped a few thousand individuals with experience. Also it seems that most CEOs are less than enamoured of the people that work for them and alongside them. A survey carried out in 1999 by the Institute of Directors and Development Dimensions International asked senior directors what percentage of their employees they would rehire if they could change all their employees overnight. Question: Was Netscape a company – or was it really an extremely cool project? More important question: Does the distinction matter?’’ ‘‘Here’s what does matter: That short-lived entity put several products on the market.’’5 Daniel Pink In terms of our day-to-day experience. wealth. Internet start-ups do not face these problems. This giant of the new economy reached only its fourth birthday. The organization is consciously designed and the people involved are hand-picked. are ‘built to last. Only 7%. here are just some of the ways in which the Internet is changing the fabric of our working lives.THE E-DIMENSION
THE INTERNET AND ORGANIZATIONS ‘‘Corporate life spans are shrinking. subsumed into AOL’s operation. They do not.’ Most of us will outlive any organization for which we work. bricks-andmortar companies who would admit to being totally happy with the structure. Remember a little outﬁt called Netscape? Netscape was formed in 1994. Internet start-ups carry little or no organizational baggage There are very few chief executives of more traditional. not companies.
’’ Another facet of decision-making in Internet start-ups is that companies grow too fast to be managed closely from the center.’’ For well-established organizations. you’ll ﬁnd us hollering back and forth across the wall. are rapidly devolved to those working in the business to determine the method and manner of implementation. bouncing around inside the cubes. The difference is that decision-making in ebusinesses is often a more collaborative process. structures are more ﬂexible and dynamic.
. the leadership team typically make all the big strategic decisions about what the company is going to do. but it’s a pretty ﬂat organization. In Internet organizations. grabbing each other and going off into a little conference room. Unlocking the promise of an information economy now depends on dismantling the very same managerial hierarchy that once brought greatness. Hierarchy has not vanished but it has been augmented by distributed lattices of interconnections. At Yahoo! for example. once taken centrally. CEO Tim Koogle described the set-up at Yahoo!: ‘‘It’s not hierarchical. Shoshana Zuboff of Harvard Business School believes that a rigid hierarchy gets in the way of making best use of technology. In an interview on The Motley Fool Radio Show in April 2000. She writes: ‘‘The successful reinvention of the ﬁrm consistent with the demands of an information economy will continue to be tragically limited as long as the principal features of modern work are preserved.’’6 Decision-making In an e-business. Decisions. as with more traditional businesses.26
Hierarchy A traditional organization is structured around two key concepts – the breakdown and management of goals and tasks through the use of hierarchy and stable employee relationships over prolonged periods of time. Tim Koogle has described how working in adjoining cubicles affects the leadership team’s approach to decision-making: ‘‘During a normal day. We do have a structure in the company because you need a structure to have some order on things.
as the working day has expanded. It didn’t happen all at once. business growth needs to be fuelled by new blood. and facsimile transmissions can be sent or received at any time of day or night. the speed of growth means that the need for more formalized communication systems can kick in very quickly. using effective co-ordination of resources to reduce the time needed to develop new products. every day more work was being automated. went from 12 or so people to over 400 in less than a year.THE E-DIMENSION
Internal communication This is not a problem for e-businesses in the early days when the organization consists of a small group of highly motivated people who spend a lot of time in each other’s company. ‘‘People are now becoming the most expensive optional component of the productive process and technology is becoming the cheapest. For Internet businesses. But.com. The ill-fated boo.
. Companies compete on speed. By deﬁnition these are people who were not part of the original setup and therefore processes and systems need to be introduced to ensure that everybody is kept informed – it no longer happens naturally. it also changes time.’’7 Michael Dunkerley Growth has been decoupled from employment Particularly during the 1980s. The working day now lasts 24 hours Information technology has the capacity not only to change where knowledge and power reside in the organization. And both the white-collar workplace and the factory ﬂoor were transformed. The ‘‘working day’’ has less meaning in a global village where communication via e-mail. and who therefore automatically keep themselves and each other in the picture. voicemail. starting in the manufacturing industries and then moving into white-collar work. Paradoxically. deliver orders or react to customer requests. for example. so time has contracted. it became more and more apparent that the real bottom line of technology was that it made jobs go away. However.
Many traditional companies retain a ‘‘knowledge is power’’ mentality. it also carries ideological weight. for the information highway facilitates a loose corporate web connected by modem rather than physical afﬁnity or long-term relationship. This contrasts with earlier generations of technological advance. Finding the right people to sustain rapid growth is problematic for any business at any stage of its life cycle. e-businesses have a better track record at knowledge management. the factor that limits or enables rapid growth is their capacity to recruit and retain good people.8 that information technologies transform work at every organizational level by potentially giving all employees a comprehensive or near-comprehensive view of the entire business. By and large. most of the consultancy fees paid by e-business start-ups to date have gone to specialist recruitment companies. The worker brings to the marketplace only his human
. it can be virtually impossible. The rise of the virtual organization Virtual organizations are formed by a cluster of interested parties to achieve a speciﬁc aim – perhaps to bring a speciﬁc product or idea to market – and then disappear when the aim has been achieved. Signiﬁcantly. These technologies surrender knowledge to anyone with the requisite skills. particularly now that the Internet economy has lost its luster. and even those that consciously set out to create a knowledge-sharing environment can fall foul of knowledgehoarding by suspicious business units or individuals fearful of becoming dispensable. where the primary impact of new machines was to decrease the complexity of tasks.28
Not enough good people to go around For most e-businesses. The concept is not just a useful tactic for corporate downsizing. For an unproven e-business start-up. in an article for Scientiﬁc American. Manuel Castells argues that: ‘‘it is not accidental that the metaphor – virtual – is cybernetic. Technology also facilitates the open sharing of know-how within a company. The workplace becomes transparent Shoshana Zuboff argues.
from ﬁxed base phones to mobiles. The electronic digital frontier is beckoning. Working life has never felt so insecure for so many. THE IMPACT OF TECHNOLOGY – A FINAL THOUGHT The introduction to this chapter discussed the remarkable capacity we have to absorb new technologies like the mobile phone. Shoshana Zuboff certainly believes that the technological tail is wagging the human dog. co-author of In Search of Excellence and probably the world’s best known management guru. The virtual corporation pays only for the value the worker can add. If the worker gets weary of the insecurity. It doesn’t just augment. He should become an entrepreneur himself. it transforms our experience of work.’’ THE RISE OF THE CYBER COTTAGE INDUSTRY In recent years. never to return. how we work.THE E-DIMENSION
capital. Tom Peters. But the Internet’s impact on working life is different. In just 15 words from her book In the Age of the Smart Machine – a book all the more remarkable for being written back in the 1980s – Zuboff sums up the challenge we now face.’’9 Working from home It is technically possible for a worker to be based at home using e-mail and other technology to communicate with colleagues and the outside world generally. ‘‘patterns of morality. sociality. ‘‘So far. It is signiﬁcant that even the high-tech pioneers tend to cluster in hotspots like Silicon Valley to enable them to talk with and learn from like-minded others.g. when we work – even whether we work. this isn’t what most people want from work. has
. the solution is obvious. the issue is not the capacity of the technology. And it’s probably true – we can cope with singular new technologies which augment a previous technology by adding a new feature – e. We are all Bill Gates – or at least we should be. In the ﬁnal analysis. and feeling are evolving much more slowly than technology. it’s our capacity to cope.’’ she writes. In reality. It transforms where we work. The job for life has disappeared.
only giants could provide. telecommuting from home. There will also be ad hoc organizations. of large conglomerates and small individual entities.30
been looking at how changes at a corporate. What’s more.’’ McKinsey warning its clients that the biggest challenge for companies is ‘‘the war for talent. of large political and economic blocs and small countries.’’ business magazines like Fast Company devoted to Me Inc. It is a topical theme that takes a variety of guises – knowledge workers making a living out of Charles Leadbeater’s ‘‘thin air.com and full of advice on ‘‘why it pays to quit. . It will be a world of ﬂeas and elephants. Think of Ireland and the EU. more employees will therefore work in smaller units or alone. national.’’ Tom Peters’ ‘‘brand called you. Many companies will become networks of independent specialists. and so more small companies will spring up.11 Frances Cairncross describes how. Perhaps one of the most telling features of the new economy is that increasing numbers of people can describe themselves without irony as one-person global companies. In The Death of Distance.’’10 The Internet gives added impetus to anybody considering the ‘‘ﬂea’’ life.’’ how you should be hot-desking with colleagues. and global level impact on the nature of work for us as individuals.
. small companies can now offer services that. Individuals with valuable ideas can attract global venture capital. Charles Handy paints this picture of the twenty-ﬁrst century world of work: ‘‘It’s obviously going to be a different kind of world .’’ Harriet Rubin’s ‘‘soloists. in the past. or me. and generally reconsidering your whole future. . The smart thing is to be the ﬂea on the back of the elephant. temporary alliances of ﬂeas and elephants to deliver a particular project. Elephants are a guarantee of continuity but ﬂeas provide the innovation. or consultants and the BBC. the cost of starting new businesses is declining. A ﬂea can be global as easily as one of the elephants but can more easily be swept away. either totally on their own or with a cluster of like minds. by using technology creatively.
D. MA. cit. (1988) In the Age of the Smart Machine: The Future of Work and Power.
. 7 Dunkerley. October. 10 Handy. A.html) 6 Zuboff. Orion. Cambridge. 2 Research by Cornell University as reported in The Guardian. Polity.com/online/46/freeagent. M. op. Cambridge. & Wooldridge. New York. (1998) The Information Economy.fastcompany. p. p. (From text of speech given by Handy at the CBI National Conference ’99.’’ Scientiﬁc American. 3 Cairncross.) 11 Cairncross.164. London. J. (1997) The Death of Distance. (2000) A Future Perfect. M.125.’’ Fast Company 46. 8 Zuboff. 9 September 1997. op. 9 Castells. (1995) ‘‘The emperor’s new workplace. C. 5 Pink. (1996) The Jobless Economy. 4 Micklethwait.THE E-DIMENSION
NOTES 1 Castells. F. Basic Books. (1999) in CBI News. S. cit. Heinemann. September. London. (2001) ‘‘Land of the free. Blackwell. (www. S.
» Case study: Tesco.05
07.The Global Dimension
» The stages involved in becoming a global player.10. » Six key principles that underpin effective management on a global scale. » The implications of globalization for individuals.
with the possible exception of technological innovation. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across international borders. it is the main destabilizer of the management psyche. Although Nissan has since gone on to make a tremendous success of their Sunderland plant. a northern worker expresses satisfaction at Nissan’s arrival in an unintelligible English dialect. precisely spoken Japanese businessman. In the advertisement. In their brilliant book A Future Perfect. which is ‘‘translated’’ for the viewer’s beneﬁt by a smartly dressed. WHAT IS GLOBALIZATION? Globalization is an economic process. It refers to the increasing integration of economies around the world. . argue that there are four stages to becoming a truly global company: 1 Corporate colonialism: using foreign outposts simply as ‘‘dumb terminals’’ to distribute domestic goods. but locally (in the north east) people complained so much that it had to be taken off the air. the Japanese company commissioned a television PR campaign.34
‘‘Globalization is not the only reason for . the result of human innovation and technological progress. hailed at the time as a new lease of life for the moribund British car industry. 2 Cheap hands: using foreign labor because it cost less than domestic workers. the story is nonetheless one of the more eye-catching indicators that the corporate road to globalization is fraught with pitfalls. uncertainty. John Micklethwait and Adrian Wooldridge. particularly through trade and ﬁnancial ﬂows. with workers successfully adopting many Japanese-based quality practices. The advertisement was very funny.’’1 John Micklethwait and Adrian Wooldridge When Nissan established a car plant at Sunderland. but.
. both journalists for the Economist. .
The ability of the top management team to deliver top quality at a competitive cost becomes paramount when competing in the global marketplace. small agile companies have an advantage over giant organizations that are unable to take decisions quickly. Just as Microsoft could appear from virtually nowhere to usurp the market of mighty IBM. Micklethwait and Wooldridge go on to outline the six principles that they believe need to underpin a company’s effort to become an international player. only giants had the scale and scope to provide. In 1998. THE SIX PRINCIPLES OF GLOBAL MANAGEMENT 1 Management matters. around 50% of the companies that operate internationally employ fewer than 250 employees. This stage is less to do with structure than attitude of mind. Global management has to be multicultural. 2 Size complicates. while small companies ﬁnd it easier to reach markets around the world. On the other hand. The best global companies take the best skills and ideas from wherever they are in the world. so a few years later Netscape appeared overnight and threatened to undermine the market (and the size) of Microsoft. a good part of that differential was due to the fact that GM was simply less efﬁcient than its rival. Technology-enabled small companies can offer services that. in the past.THE GLOBAL DIMENSION
3 Going transnational: companies begin to use their foreign subsidiaries for ideas as well as implementation. Who will be next? And where will they come from? In this globalized world. big companies will more readily offer high-quality local services. General Motors spent twice as much on labor per car produced as Toyota. such as putting customers
. particularly when it comes to corporate culture. and that in turn is a management responsibility. 4 Genuinely multicultural multinationals: nationality of company employees ceases to matter. and to tailor global products for local markets. According to research by the London Business School.
in one part of the world directly in touch with expertise in other places, and monitoring more precisely the quality of local provision. The things that deﬁne good national management also deﬁne good international management. As Sony’s ﬁnancially disastrous excursion to Hollywood showed, even the best companies can leave their brains at home. It was only the installation of a new manager operating good management practices that turned Sony’s 1995 loss of $1.7bn into a proﬁt of $3.4bn in 1997. It pays to behave ethically. Some multinationals have treated their overseas operations a bit like a ‘‘lads’ holiday’’ where all normal rules of good behavior are suspended. However, in a world where reputation is becoming an ever more prized asset, it makes good business sense for a company to play to its genuine strengths rather than cynically exploit its host country’s weaknesses. Global management is about how well companies husband human capital, knowledge in particular. There is a tendency for companies to think that their home talent is best; these companies deny themselves access to the full global pool of talent at their disposal. Companies will happily talk about ambitions for a signiﬁcant proportion of business proﬁts to come from overseas but seem less willing to recruit the same proportion of top managers from overseas. This is the culture dilemma: bring forward local talent, and become more multicultural; while on the other hand remaining loyal to the culture that brought you national success in the ﬁrst place. Far from dissipating the effect of personality, globalization has made leadership even more important. Company leaders who operate on a global platform ﬁnd that both their strengths and weaknesses are ampliﬁed. Also, just as a successful manager of a club football team needs a different skill set to succeed as a national coach, so global leaders need to recognize that there may also be additional skills needed to be effective in a particular country’s work environment.
THE GLOBAL DIMENSION
GLOBALIZATION: MORE THAN JUST AN MBA LECTURE TOPIC There was a time when globalization was only a concern for multinational companies and business studies students. But the fact is there are plenty of ways in which globalization can impact on your organization, no matter what its size or industry sector. Which of the following might apply to you or your company? » Sources of competition: your biggest competitor could now be anywhere in the world. » Manufacturing capacity will continue to shift from western economies to those countries with access to cheaper labor. Equally, technology is allowing more and more knowledge-based work to be shipped to the cheapest environment. This may bring jobs to emerging economies but can create severe pressures for unskilled workers in more advanced economies. » Traditional jobs still exist – but not here. As Kevin Kelly has put it, ‘‘the old economies will continue to operate proﬁtably within the deep cortex of the new economy.’’2 The fact is that around the world there are just as many cars and ships being constructed as ever, just as many roads being built, just as much coal being produced, as much steel being made. The difference is where they are now being produced. ‘‘Traditional’’ industries are all thriving elsewhere in the world. » In a world of instant communication, it’s harder to sustain a lead in innovation. Product improvements can rapidly get copied. » We are also seeing the internationalization of business practices, with techniques like business process re-engineering now being deployed globally. » A key challenge for companies will be to hire and retain good people, extracting value from them, rather than allowing them to keep all the value they create for themselves. A company will constantly need to convince its best employees that working for it enhances each individual’s value. » With the relentless if rocky rise of the World Wide Web (and don’t forget that it is worldwide), new channels of distribution, and entirely new business models, are being created faster than ever before. All
the traditional assumptions that business leaders may have learned at business school – about strategy, pricing, selling, how to manage people, and so on – are under ﬁerce attack. The Web has the capacity to turn every company in every industry upside down and inside out. » Culture and communications networks, rather than rigid management structures, will hold companies together. Many companies will become networks of independent specialists; more employees will therefore work in smaller units or alone. » As the workforce becomes ever more diverse, cultural awareness training becomes not merely a token nod in the direction of political correctness, but a crucial part of enhancing both managerial and front-line effectiveness. » Geography is becoming less important and people are becoming more mobile. A new breed of graduate and post-graduate is emerging that has the conﬁdence to look beyond national boundaries to the international job market. Within organizations, we are seeing a workforce that grows increasingly transient, and that is prepared to move between companies and even continents. The bottom line is that the world of work has changed irrevocably. The collective impact of globalization and technology is that none of us any longer has a protected, inviolable career. If there is a cheaper or better quality alternative to you and your skill set anywhere in the world, you are at risk. Darwin was right: if you can’t outpace your environment, you’re doomed. CASE STUDY: TESCO – A GLOBAL SHOP FOR GLOBAL PEOPLE Succeeding in the international retail sector is no mean feat. In recent times, Marks and Spencer conﬁdently expanded their business overseas, only to return chastised to base a few years later with heavy ﬁnancial losses and its reputation badly dented. Tesco is that real rarity – a UK retailer that is proving it can thrive on an international stage. If all goes to plan, Tesco should break through the £1bn proﬁt barrier for the second year running in 2001. Although we British tend to think of Tesco as a grocer, it has
staff. Tesco sends a team into a country long enough to understand the politics. ‘‘it helps in a lot of little ways. You don’t make subsequent mistakes. seasons or events. in Leahy’s view is that the company ‘‘never had an ofﬁce class. ‘‘How we understand customers. Management development is a key instrument for the company. It didn’t. in the way it merchandises and promotes its goods. the culture. What underpins Tesco’s success. and the competition. The advantage of this. Tesco will let people go as far as their skills will take them. and DVDs. Leahy believes that the Tesco formula for success is straightforward.’’3 This means that the stores themselves often look different to the UK model. And with some success – the company now accounts for 4% of the UK non-food market. both nationally and internationally.’’
. CEO Terry Leahy quickly embraced the concept that each country in which Tesco intended to stake a place in would require a different approach – one that was acclimatized to the indigenous culture. books. ‘‘Tesco has three skills. How we manage people. for example.’’ To achieve this level of understanding.’’ he said in an interview. in other words. you can start anywhere in the business and you get on according to your own ability. Although Tesco seems like quite a traditional retailer – walk into the company’s head ofﬁce in Cheshunt and the impression is of an organization that hasn’t changed much in 30 years – it avoided the pitfall of corporate colonialism that all too many UK companies have succumbed to. Tesco’s approach may be meritocratic but it certainly isn’t laissez faire.’’ he says. ‘‘Once you make that break. or selects its product according to local tastes. There was no special graduate scheme. and suppliers. says Leahy is that ‘‘instinctively.THE GLOBAL DIMENSION
in recent times expanded into non-food areas like clothes. Carrefour’s stores are run by French managers. simply try to export and impose the practices that have worked so well in the UK. They are also normally run by natives of the country. and working hard at imbuing a set of values about how the company deals with customers. How we use technology. In France. That. electrical appliances.’’ In other words. the store is local.
2 Kelly. London. (2000) A Future Perfect. 3 Leahy. London. (1998) New Rules for the New Economy. p.7. A. (2001) quoted in ‘‘One step ahead.
.’’ Business Voice. T. Heinemann. Fourth Estate. November. & Wooldridge. K.40
NOTES 1 Micklethwait. J.
The end of careers.The State of the Art
» » » » » » » The knowledge dilemma – to share or to hoard? Organizations – does Darwin rule? Attitudes to work. The power of language. The war for talent. work and home.10.
. Women. men.
not to mention a life of leisure.42
‘‘It has become professionally legitimate in the United States to accept and utilize ideas without an in-depth grasp of their underlying foundation. understanding the key issues in the ﬁeld of organizational behavior does not guarantee that you will create a new theory or even manage future challenges more effectively than the next person. One thing is certain: when it comes to the twenty-ﬁrst century world of work. and understanding in a given area is more likely come up with valuable insights than somebody else who has given the subject little or no thought. a measure of security and maybe even union representation – has fallen out of economic fashion. Instead. Learning is at the heart of productive activity. less hours at work. but the chances are that you will. and with it. It wasn’t all that long ago that a technology-enriched future was going to bring prosperity for all. we in the UK now work the longest hours in Europe. As the writer Naomi Klein puts it in her book No Logo:3 ‘‘Offering employment – the steady kind. and a life of leisure funded by being paid more for doing less seems like a pipedream. . . impermanence is in and jobs-for-life are out. trying to predict what the future world of work will hold for us all seems like a doomed pastime.’’1 Richard Pascale ‘‘Learning is the new form of labor.’’ It’s difﬁcult to imagine a scenario in which jobs-for-life could make anything like a meaningful comeback. On that basis. holiday pay.’’2 Shoshana Zuboff ‘‘Chance favors the prepared mind’’ Louis Pasteur Nineteenth-century scientist Pasteur believed that somebody who has gone to the trouble of obtaining relevant knowledge. [It is] no longer a separate activity that occurs either before one enters the workplace or in remote classroom settings . That said. skills. with beneﬁts. and without the commitment necessary to sustain them. Companies lose money – and
and the end of careers 2. articles. conferences.
In addition. emotional intelligence. the ripped up psychological contract between organization and individual. the power of language. agescape: demographics and the workplace. All will hopefully provoke your thinking. Some will certainly prove to be substantive. provocative quotes or snippets of information that help to capture the spirit of our current organizational age. Against this highly uncertain backdrop. and beyond that. THE KNOWLEDGE DILEMMA – TO SHARE OR TO HOARD? There are many who argue that knowledge management or intellectual capital will be the foundation of corporate success over the coming
. managing in a downturn. men. the balanced scorecard. the end of loyalty. the war for talent. the narcissistic leader. trust your judgment. women. others may be cul-de-sacs. Reﬂect. Some will apply at the macro level. lessons behind the rise and fall of the dotcoms. interlude – the way we work. the end of careers 1. The correlation between company proﬁt and job growth. scattered around this section you will ﬁnd a number of ‘‘zeitbites’’ – short. the business airwaves are abuzz with books. the smart organization. These are the key ideas covered in this section: » » » » » » » » » » the knowledge dilemma – to share or to hoard? organizations – does Darwin rule? attitudes to work. and so on. and home. discuss. This chapter explores a handful of the emergent ideas and concepts that are clamoring for managerial attention.THE STATE OF THE ART
they purge staff. the return of loyalty. Companies announce record proﬁts – and they purge staff. others may strike at the very heart of your experience of work. work. has never been weaker. according to Klein. and videos exhorting the modern manager to take on board the latest big ideas: the application of complexity theory to business. the free agent nation.
inefﬁcient systems. The study found that if employees want to impress a potential permanent employer. ZEITBITE ‘‘It’s obviously going to be a different kind of world in the next century . If companies are set to stand or fall by their management of their intellectual capital (deﬁned by Thomas Stewart. And yet according to a study led by Adrian Patch. an early writer on the topic as ‘‘packaged useful knowledge’’).’’ hoarding their expertise in the fear that sharing knowledge makes them more dispensable.’’ ‘‘A ﬂea can be global as easily as one of the elephants but can more easily be swept away. and the willingness of employees to do so. workers have responded to the end of the job-for-life culture by becoming ‘‘professional parasites. Elephants are a guarantee
. It will be a world of ﬂeas and elephants. or consultants and the BBC. . One in ﬁve workers thought it was not in his or her interest to share knowledge at work. The smart thing is to be the ﬂea on the back of the elephant. they are as likely to share information and seek to build a good reputation as contented staff employees. making effective teamwork – which depends on the open exchange of information – virtually impossible. Companies who encourage employees to manage their own careers but who at the same time create dissatisfaction by failing to fulﬁl their promises risk losing important knowledge that is often a key part of the company’s value. of large political and economic blocs and small countries.44
decade. and training. of large conglomerates and small individual entities. costing business billions of pounds a year in missed business opportunities. Think of Ireland and the EU. then their ability to develop appropriate systems and to provide a setting within which people will be willing to share their knowledge becomes a crucial organizational challenge. a research psychologist for Birkbeck College in London. The study uncovered tensions between companies who have put in computer infrastructures to enable the sharing of knowledge and information. . However. those who feel threatened or unappreciated at work guard their niche knowledge jealously.
’’5 Nigel Nicholson Over the past few years. a professor of organizational behavior at London Business School. » Communication: According to Nicholson. Thus. The lesson for managers is that the ‘‘grapevine’’ performs a function that people value at
. Nigel Nicholson. over time.’’4 Charles Handy
ORGANIZATIONS – DOES DARWIN RULE? ‘‘For the more conventional organization of modern times. In essence. has suggested that we are ‘‘hard wired’’ for certain attitudes and behaviors. temporary alliances of ﬂeas and elephants to deliver a particular project. our Stone Age ancestors needed to exchange information in order to survive the unpredictable conditions of the Savannah Plain. evolutionary psychology takes the view that people today – no matter whether they are captains of industry or burger ﬂippers – pretty much retain the mentality of our Stone Age ancestors. the propensity to gossip became part of our mental programming. The Dilbert characters seem to know what any evolutionary psychologist would tell you: hierarchy is forever. There will also be ad hoc organizations. In his book Managing the Human Animal.THE STATE OF THE ART
of continuity but ﬂeas provide the innovation. we encounter the contradictions so masterfully satirized by the Dilbert cartoon strip – employees who are cynical about employment and mistrustful of de-layering because they recognize that traditional power and hidden hierarchy are alive and well and in control of their destinies. the new science of evolutionary psychology – called Modern Darwinism by some because it has its root in the theory of natural selection – has been provoking widespread support and criticism. Below are some examples.6 Nicholson explores the implications of this for managers. Companies that try to eradicate gossip at work might just as well try to change their employees’ favorite color or musical tastes.
competitiveness. monopolizing resources. appear to have had no more than 150 members. for example. » Gender bias: Most businesses. Survey by the Manufacturing. » Team size: Evolutionary psychology explores the dynamics of the human group. Science and Finance Union. » 38% of managers beneﬁt from health insurance schemes not available to the wider workforce. and a desire for control and hierarchy. » 23% have separate toilet and/or shower facilities. says Nicholson. ZEITBITE Many senior managers still see themselves as a breed apart. in the sense that it is based upon features that predominate more in male than in female psychology: technical focus. managers have separate dining facilities.7 author Annette Simmons explores organizational turf wars – why they occur and what we can do about them. July 1997 In another book. 1 Occupation: marking territory. It’s more productive to put managerial energy into making sure that the ‘‘grapevine’’ contains the right information rather than try to eradicate it altogether. and » 33% still expect to be addressed as ‘‘Sir’’ or by their title.46
a deeply engrained level. » 29% have longer holidays than their staff.’’ The organizational model is male. single-mindedness. Territorial Games. are run to satisfy distinctively masculine drives: ‘‘Many businesses make few allowances for women. A study of status and perks reveals that: » in 17% of ﬁrms. Simmons identiﬁes and describes ten different territorial games that are enacted within organizations. The message for managers is that people will likely be most effective in small organizational units. Our ancestors’ clans on the Savannah Plain.
. and those who want to succeed are reluctant to press for concessions for fear of being stigmatized as taking advantage of their gender. relationships or information.
mobile lifestyle. 6 Strategic non-compliance: agreeing to take action with no intention of acting. name dropping. deliberately triggering anxiety in others. making threats (veiled or overt). but while the prospect of the two being interlinked still exists. People’s work will become more integrated with home. In his book.
. or giving false information. covering up. However. inﬂuencing a group to treat another as an outsider. so most people will still seek more traditional forms of employment. 8 Shun: personally excluding an individual.THE STATE OF THE ART
2 Information manipulation: withholding. if these hierarchies disappeared. 4 Powerful alliances: using relationships with powerful people to intimidate. wearing others down by out-talking them. 7 Discredit: using personal attacks to undermine the reputation or credibility of others. based on the principles of evolutionary psychology. although it’s not normal for our culture. people would not have enough to aspire to. and turf wars have become the organizationally accepted alternative to ﬁsticuffs. 3 Intimidation: yelling. These turf war tactics can be traced backed to their Darwinian roots. 10 Filibuster: using excessive verbiage to prevent action. We are by instinct a territorial race. 5 Invisible wall: discreetly creating perceptions that undermine previous agreements. 1 We can adapt quite well to a semi-itinerant. 2 The traditional idea of the career is a modern invention to ﬁt the linear hierarchy of organizations and occupations. staring someone down. 4 So-called virtual organizations may grow but people will still desire and create networks like clans and seek to ﬁnd real community through working relationships. so will the ofﬁce. 9 Camouﬂage: creating distractions. 3 The separating boundary between work and home is also an artiﬁce of recent times. Nicholson makes seven predictions about the future of organizations.
They create an internal labor market and stimulate competition. All human societies are structured with differing levels of power and authority. We can’t have virtual water or food – by the same token. Organizations. fall into this pattern because it is natural for human beings to create and replicate such structures. sociological. They recognize differences in human abilities. They recognize the motivational value of upward progression. including the earliest (armies. 6 People will always desire face-to-face dealings. Organizational hierarchies exist the way they do because they match the psychological. there will never be no work or jobs to do. religions). ZEITBITE In these de-layered times. and economic needs of human beings.48
5 People will always want to make and have things. Flatter structures force people to work too long to the detriment of family life. but only partially. in cheek – are ten reasons why ‘‘tall is beautiful. anthropological. the concept of hierarchy has had a bad press. New IT techniques reduce the dysfunctional features of steep hierarchies. rather that we need to try to understand how human nature and our hardwired sense of what behaviors are appropriate impacts on the way we live and work in the twenty-ﬁrst century. Natural spans of control force organizations to grow upwards and increasing complexity of technology and business limits the natural span of control. Here – with tongue partially. Writers on evolutionary psychology like Nicholson don’t advocate that we return to a Stone Age way of life. 7 People will always want to congregate in common spaces.
6 7 8
.’’ 1 2 3 4 5 Tall organizations reﬂect the nature of human society.
followed by ‘‘work put before home and family.’’ Given that language exchange is the primary way in which people swap information. redundancy. The survey’s full ‘‘top ten’’ list of desires that people expressed about work was as follows:8 1 2 3 4 5 6 7 8 9 10 Being able to work fewer hours A change in the company culture Work ﬂexible hours Reduce commuting – or avoid it Work from home Change jobs or relocate More staff Earn more Retire Reduce stress.g. more than anything else.’’ The overriding sense one gets from this survey is that the working population laments the extent to which work life imposes on home life. our careers seem to manage us.
The survey also explored what people felt they had sacriﬁced in order to work. ‘‘Missing the children growing up’’ came top of the pile. and formulate plans. make decisions.’’ ‘‘missed leisure/hobby time.9 Anne Donnellon of Harvard Business School uses anthropological and linguistic research techniques to focus on talk as the ‘‘medium through which team work is done and through which organizational and individual forces can be observed and analyzed.’’ and ‘‘being away from home short-term. And yet relatively few of us have actively sought to redress that balance. e. rather than the other way round. it often takes a forced change of circumstances. Donnellon’s
.THE STATE OF THE ART
ATTITUDES TO WORK A recent survey into attitudes to work found that.’’ ‘‘moving home for employer. THE POWER OF LANGUAGE In her book Team Talk. to bring about a signiﬁcant change. people would like to reduce the number of hours they spend working. More often than not.
. or avoidance language. if anything. use of win-win and win-lose language. Populations in Europe are poised to plunge on a scale not seen since the Black Death in 1348. nicknames. challenges. use of confrontational. » The future can be viewed optimistically with the weight of numbers battering down ageism in the workplace and allowing people to work longer and more ﬂexibly.g. but populations in many countries are set to decline. in 2007 its population will reach a peak and then start falling. However. 5 Conﬂict management tactics: e. the use of terms like ‘‘we’’ or ‘‘us’’ to describe the team. societies have been extraordinarily young. apologies. Not only will the age balance shift.g.g. corrections. and by 2025 there will be more Italians aged over 50 than under that age. 3 Power differentiation: e. use of slang. 2 Interdependence: e. AGESCAPE: DEMOGRAPHICS AND THE WORKPLACE10 Throughout history. 6 Negotiation process: e.g. accommodating. verbal aggression. What emerges clearly from Donnellon’s work is a sense of the signiﬁcant extent to which the language used by teams both reﬂects and indeed shapes relationships within and outside the team.g. explicit references to independence or interdependence. we will see that average rise to 50 in the West. Within our lifetime. with an average age of around 20. She looks at a team’s use of language through six dimensions. The demographic changes will have an impact globally. Italy will follow soon after. formal forms of address (Mr Blair or Tony). They will also have an impact on some key area relevant to organizational life.50
book represents the long overdue entry of socio-linguistics into the ﬁeld of management studies.g. In the late 1990s Japan became the ﬁrst country ever with an average age of 40. 4 Social distance: e. 1 Identiﬁcation: e.
» The waves of downsizing and down-layering from the 1990s are likely to continue as companies shake out a perceived excess of middle-aged managers. a sociology professor at the University of California. while many western countries will be hit by declining labor forces. Favorable demographics will foster fast progress in developing countries. feeding everybody. clearing up. washing the laundry. not glut. The opportunities for many older workers will lie as subcontractors to large companies. ZEITBITE ‘‘I believe that 90% of white-collar jobs in the US will either be destroyed or altered beyond recognition in the next 10 to 15 years. The alternative is a quite unacceptable escalation in contributions. whether as individual freelancers or by setting up their own small businesses. Where both parents worked – the norm other than for the company’s most senior executives – a typical day would involve dropping the children off at the company’s subsidized day-care center. That’s a catastrophic prediction. given that 90% of us are engaged in white-collar work of one sort or another. » State pensions stand in the demographic ﬁring line. spent three years interviewing hundreds of employees of a Fortune 500 company renowned for its family-friendly policies.’’11 Tom Peters
WOMEN. » All countries in the West will ﬁnd their weight in the world diminishing. Berkeley. doing the shopping. The parents then spend a long – typically 10-hour – day at work before collecting their children from the center. MEN. overburdening the much smaller working population that will have to ﬁnd the resources to honor these promises. putting the children to bed. AND HOME12 Arlie Russell Hochschild. WORK. and then
. in many countries pension promises are unaffordable and will have to be broken. confers power in markets.THE STATE OF THE ART
numbers of young people available for work will start bidding wars for their services – scarcity. to see how they reconciled their work and their home life.
however.’’ The Guardian. 17 January 1998
. In some cases. 14 January 2000
INTERLUDE – THE WAY WE WORK Here’s a selection of items that have appeared in national newspapers over the last few years. Perverse though the idea might seem. were taken seriously. They speak volumes about what people are thinking and feeling about the world of work. This contrasted with their home life where they felt isolated. ‘‘Company drivers clock up an annual total of estimated 8. Hochschild offers the startling observation that for many work had become home. And these were the days when everything went according to plan.2 billion unnecessary business miles with the sole purpose of minimizing their tax liability. and got paid for their efforts. both men and women. regularly putting in signiﬁcant bouts of overtime. In The Time Bind. when faced with a choice between stress at work and stress at home.13 a book based on her research.’’ Many companies have dispensed with ‘‘employees’’ and replaced them with ‘‘colleagues’’ and ‘‘associates. and home had become hard work. Often. utterly exhausted. chose to work where at least they had contact with colleagues.52
heading to bed themselves. and ground down by never-ending demands. Hochschild found that these parents rarely made use of the familyfriendly policies promoted by the company. Rather they spent ever longer hours at work. the book has clearly struck a chord. taken for granted. ZEITBITE The Center for Tomorrow’s Company predicts that by 2025 the word ‘‘employee’’ will seem as dated as the term ‘‘domestic servant. they needed the money.’’ Daily Telegraph. rapidly becoming a best-seller in the US.
’’ The Independent. according to a US survey. 18 April 2000 ‘‘Indian restaurants in the UK now employ more people than the steel.’’ The Times. 7 April 2000 ‘‘A survey by the Institute of Personnel and Development reveals that 40% of UK workers under 30 think it normal to change jobs every two or three years. Workers hate the new color schemes so much that they now spend less time away from the production line.THE STATE OF THE ART
‘‘Half the population meet their future partner at work.’’ News of the World. April 1998 ‘‘A survey by Accountancy Age reveals that out of 600 accountants surveyed.’’ Financial Times. 2 February 2001 ‘‘Bosses at an Austrian car factory discovered that production was up 8% after painting the toilets bright pink and green. They are also less likely to be laid off. coal mining. 7 October 1999 ‘‘Physical appearance counts in the workplace. and shipbuilding industries combined.’’ The Mirror. 38% said they wish they had never gone into the profession.’’ The Guardian. 18 May 2000 ‘‘According to a new survey. 22 March 2001
. People rated as attractive are two to ﬁve times more likely to be taken on.’’ Survey by the Industrial Society. 91% of 1516 business managers questioned said that they worked longer than their contracted hours.’’ Daily Telegraph.’’ The Times. the proportion of women returning to work after giving birth has risen from one-quarter to two-thirds.’’ The Guardian. 25 March 2000 ‘‘A survey by HSBC Bank reports that one in four workers would give up 20% of their pay for an extra day off each week. 14 July 1999 ‘‘Over the past 10 years. 13 April 2000 ‘‘A report by Ofﬁce Angels has found that 70% of staff believe that the people they meet outside work judge them instantly by their job titles.
Talent wins. a McKinsey director who helped manage the study. sophisticated business people who are technologically literate.’’ ZEITBITE A survey in 1999 from the Institute of Directors and Development Dimensions International asked HR directors what percentage of their employees they would re-hire if they could change all their employees overnight. capital is abundant. they will also have to work harder to keep their best people.. With the Entrepreneurial pattern. a yearlong study conducted by a team from McKinsey & Co. the Wired pattern replaces the lifelong identity of the career with a series of ‘‘brief habits. is in unavoidable decline according to a fascinating pamphlet14 from independent UK think tank Demos. has suggested that the most important corporate resource over the next 20 years will be talent: smart. The McKinsey team is blunt about what will result from these trends in its report. The authors describe two work patterns – the Wired and the Entrepreneurial – which might supplant the traditional career. In that kind of environment. In the new economy. competition is global. titled The War for Talent. and operationally agile. globally astute. as an institution. says Ed Michaels. involving 77 companies and almost 6000 managers and executives. at the same time as companies unload people in droves. ‘‘all that matters is talent. Half said they would re-hire between 0% and 40%.’’ at the heart of which is spontaneity rather than continuity of projects and relationships.54
THE WAR FOR TALENT Paradoxically. Not only will companies have to devise more imaginative recruitment practices. The search for the best and the brightest will become a constant. Flores and Gray widen out the narrow economic deﬁnition of entrepreneurship to include all manner of activities which initiate
. ideas are developed quickly and cheaply. and people are willing to change jobs often. In a nutshell. the supply of it will be going down. And even as the demand for talent goes up. costly battle.
THE END OF CAREERS 1 The career.
and in August 1997. and global level impact on the nature of work for us as individuals.
. passionate believes that the individual has become the fundamental unit in the new economy. New York. he has focused increasingly on how changes at a corporate. co-author with Bob Waterman of In Search of Excellence in 1982. The authors go on to examine these new forms of working life in some detail and consider the implications for individuals and communities. CEO of Working Solo Inc. quoted in the Fast Take newsletter. THE END OF CAREERS 2 Tom Peters. New York. In recent years. Except this: start today. (1990) Managing on the Edge. Basic Books.THE STATE OF THE ART
meaningful change in a context of shared responsibility. There is no single path to success. And there is no one right way to create the brand called You. This could be in commerce. 2000
NOTES 1 Pascale. he contributed an article to Fast Company magazine called ‘‘The brand called you: you can’t move up if you don’t stand out. service or in society in general. national.’’ Terri Lonier. They conclude that core institutions – from education to pensions – need restructuring to support these changes. You are in charge of your brand. 2 Zuboff. (1998) In the Age of the Smart Machine.. March 7.’’ ZEITBITE ‘‘In the future – the not-too-distant future – only two groups of people will be in the world of work: entrepreneurs and those who think like entrepreneurs. R. S.’’ It’s a brilliant synthesis of economic. Or else. Simon & Schuster. marketing and business themes that ends with a stark conclusion: ‘‘It’s this simple: you are a brand.
Texere. New York. 7 Simmons. N.) 5 Nicholson. Boston. (2000) No Logo. (1996) Team Talk. & Gray. (1999) Agequake. (2000) Entrepreneurship and the Wired Life: Work in the Wake of Careers. 4 Handy. October. 14 Flores. N. July–August. MA.56
3 Klein. London. 18 July 1998. (1998) The Time Bind: When Work becomes Home and Home becomes Work. C. P.R. (2000) Managing the Human Animal. London. (1998) ‘‘How hardwired is human behavior?’’ Harvard Business Review. London. Demos. Amacom. Metropolitan Books. 6 Nicholson. 11 Peters. 13 Hochschild. T. A. (From text of speech given by Handy at the CBI National Conference ’99. Nicholas Brealey. Harvard Business School Press. 9 Donnellon. 10 This section was derived from ideas set out in Wallace. 8 Survey by Management Today magazine and specialist consultancy WFD.’’ The Economist. (1999) in CBI News.
. New York. Flamingo. (1998) Territorial Games. J. 24 September 1998. 12 This section was derived from ‘‘The women and work survey. A. N. New York. (2000) ‘‘What will we do for work?’’ Time 29 May. F. quoted in Daily Telegraph. A.
Sears. and The Natural Step. Encyclopaedia Britannica.Organizational Behavior in Practice
» Organizational behavior is about real people taking real actions that affect the well-being of their companies.10.
07. » Common themes that emerge from these case studies.07
. » Case studies: Dell Computer Corporation. Sundaram-Clayton Limited.
DELL COMPUTER CORPORATION ‘‘It’s easy to fall in love with how far you’ve come and how much you’ve done.58
‘‘This ability to perceive the limitations of one’s own culture and to develop the culture adaptively is the essence and ultimate challenge of leadership. status. the organization chart is hyperlinked. we will look at a number of organizations and how they have tackled – with varying levels of success – challenges facing their businesses. and parables about key people and events. and David Weinberger There are a number of factors that can affect an organization’s performance. legends. In this section.’’2 Rick Levine.’’1 Edgar Schein ‘‘Today. and credo. and test values. challenge norms. Christopher Locke. » how the organization is designed and structured. Each case study will be followed by a brief description of key lessons or insights to be drawn. » organizational systems and procedures. selection. » leaders’ reactions to critical incidents and crises that threaten survival. and » the competitive marketplace. not hierarchical. measure. Doc Searls. but that’s all the more reason to look hard
. charter. » what leaders pay attention to. myths. It is how organizations manage these elements during periods of transition that often seems to determine whether they achieve their goals. and control. and termination. Respect for hands-on knowledge wins over respect for abstract authority. » the behavior modeled by management. It’s deﬁnitely harder to see the cracks in a structure you’ve built yourself. » the criteria used for reward. promotion. » the stories. These include: » the formal statements of philosophy. values.
com was a natural extension of the ofﬂine business. The story Dell Computer Corporation is one of the computer industry’s biggest success stories. Dell was quick to appreciate the potential of the Internet – in fact. That year. Originally an ‘‘ofﬂine’’ business.4
. and employees alike. The site directs each different type of customer to the appropriate secondlevel page. He started the Dell Computer Corporation in 1984 with $1000. Michael Dell founded his company with the unprecedented idea of bypassing the middleman and selling custom-built computers direct to end users. Pursuing this customer orientation still further. Established in 1984.ORGANIZATIONAL BEHAVIOR IN PRACTICE
and look often. where the relevant line of Dell products is presented. His premise from the beginning was to under-promise and over-deliver – and that applied to customers. redeﬁning the industry with its direct-sale approach and the customer support model it pioneered. The company. he earned $2000 from selling stamps. being aligned by customer categories. By the time he was 18. Even if something seems to be working. Dell. CEO. he built an e-business before anyone had even coined the term. not just the sales process.’’3 Michael Dell. has gone on to become one of the most successful computer businesses in the world.rather than product-focused. suppliers. under his leadership. not hardware model lines. Dell brings customers into the product planning and manufacturing processes. Here’s how Michael Dell himself characterizes his business approach in his book Direct from Dell. Dell himself is a member of the Board of Directors of the United States Chamber of Commerce and the ComputerWorld/Smithsonian Awards. Dell Computer Corporation The organization By the age of 12. he was selling customized personal computers. dropping out of his biology course at Austin University in Texas. The site is customer. Michael Dell’s entrepreneurial streak was beginning to emerge. it can be improved. and the management encourage everyone in the company to have contact with customers.
Encourage people to think ‘‘This is good. be ready. especially when it isn’t readily apparent. Set the bar slightly higher than you normally would. ideas. he said that the greatest threat wouldn’t come from a
. and avenues for growth.60
» Think about the customer. Competitors represent your industry’s past. not the hunted. but also be fast. If something that your competition did or didn’t do provided you with an opportunity today. but just as important has been Michael Dell’s commitment to internal organizational processes.’’ When asked which of his competitors represented the biggest threat to Dell. That leads to complacency. Success is a dangerous thing. representing new opportunities. » Be opportunistic. collective habits become ingrained. Always strive to keep your team focused on growing the business and on winning and acquiring new business. as we are at once invincible and vulnerable. Look to ﬁnd opportunity. This doesn’t mean that you want to fabricate deadlines or keep people so stressed that they quickly burn out. then be ready to change – fast. Now how can we take what we’ve proven and use it to win new business?’’ There’s a big difference between asking that and asking ‘‘How can we defend our existing accounts?’’ Analysis Obsessive customer focus linked to strategic savvy and an ongoing commitment to innovation are clearly instrumental to Dell’s success over the years. Focusing on the customer doesn’t mean that you should ignore the competition. You have to act fast. over the years. » Work to maintain a healthy sense of urgency and crisis. would you recognize it and be able to act on it immediately? Today a competitive win can be decided literally one day at a time. and complacency kills. This worked. you never want your people to act as though you are. Even though your company may be leading the market. He has described culture as ‘‘one of the most enigmatic facets of management’’5 that he has encountered ‘‘and also one of the most important. » Be the hunter. as. Customers are your future. not the competition. so that your people can achieve aggressive goals by working smarter.
Dell says: ‘‘If the person thinks in a way that’s compatible with your company values and beliefs. at every level. that means we mobilize everyone around creating the best possible customer experience and enhancing shareholder value – and we use speciﬁc quantiﬁable measurements of our progress towards those goals that apply to every employee’s performance.ORGANIZATIONAL BEHAVIOR IN PRACTICE
competitor. but he will also contribute to the greater goals of the organization. like R&D or sales. competitive culture by partnering with his people through shared objectives and a common strategy. he set out from the beginning to create a company of owners. year-round activity. and understands what the company does and is driven to do. The result is a steady pipeline of talent. and more intent on achieving their goals. it would come from the people who worked for Dell. even if that means creating a new position. he will not only work hard to fulﬁll his immediate goals.’’ Simply put. A company composed of individual owners is less focused on hierarchy and who has the nicest ofﬁce. it hires the best available candidates. When recruiting. ‘‘Why would you choose not to hire a great person just because there’s no job opening at the present time?’’7
. For us. Dell’s approach is about establishing and maintaining a healthy. the company looks for people who are completely in synch with its business philosophy and objectives. Dell doesn’t recruit strictly for job openings. As he puts it in Direct from Dell:6 ‘‘Creating a culture in which every person in your organization. Because of the constant demand for talent. the company’s head of stafﬁng. This is not just a lofty statement. it is backed up by a set of highly practical actions. for example. recruiting is a non-stop.’’ That’s not to say that Dell encourages ‘‘herd’’ thinking – but that everyone in the company is mobilized around a customer-oriented focus. To quote Andy Esparza.’’ To achieve this. His goal at Dell has been to make sure that everybody within the company feels they are a part of ‘‘something great – something special – perhaps something even greater than themselves. thinks and acts like an owner means that you need to aim to connect individual performance with your company’s most important objectives.
The story Between 1990 and 1997. The organization The Encyclopædia Britannica was founded in 1768 in Edinburgh. 2 Invest in long-term goals by hiring ahead of the game and communicating this commitment to your people. Scotland.62
Dell Computers then has an intensely people-centric culture. a printer. 3 Don’t leave the talent search to the human resources section – get personally involved as much as you can. For any company that wishes to emulate the Dell model. Now headquartered in Chicago. When Microsoft launched Encarta. by Colin Macfarquhar. In the 1990s. who knew that their encyclopedia’s intellectual material was far superior to Encarta. hardback sales of the Encyclopaedia Britannica more than halved. and Britannica.
. ENCYCLOPAEDIA BRITANNICA INC. there seem to be six keys to their approach. what the Britannica team failed to understand was that parents had bought their encyclopedia because they wanted to ‘‘do the right thing’’ for their children. Illinois. Encyclopædia Britannica Inc. and Andrew Bell. These can be summed up as follows. describe themselves as leading providers of learning and knowledge products. parents ‘‘do the right thing’’ by buying a computer. As far as the customer is concerned. 5 Build an infrastructure that rewards mastery – the best way to keep talented people is to allow their jobs to change with them. an engraver. 1 Mobilize your people around a common goal. sales of CD-ROMs blossomed. it must have seemed like a toy to Britannica’s executives. 6 Keep in touch with people at all levels of the company – immerse yourself in real information with real people. Encarta is a near perfect substitute for Britannica. During the same period.com Inc. 4 Cultivate a commitment to personal growth. whose content was derived from an encyclopedia traditionally sold at low cost in supermarkets. However.
including wireless. to make rich information available to people wherever they need it. and the recipe for Britannica’s downfall was complete. The story of Britannica is a demonstration of how quickly the new economics of information have changed the rules of competition. It has taken Britannica four years to begin to recover its position. small agile ﬁrms have an advantage over giant organizations that are unable to take decisions quickly. but rather why those mistakes occurred. Who will be next? And where will they come from? In this world. From a cultural perspective. agile newcomers on a par with large corporations and able to compete head-on with them for new business. compared with around £200 to produce a set of Britannica. making Britannica information more widely accessible. the company has set its sights on making full use of all new media. Some might therefore argue that Britannica’s woes could be ascribed simply to a set of poor strategic choices. The Britannica story is a parable about the dangers of complacency. BritannicaSchool.
. The fact that a company has been around for over 200 years doesn’t grant it any special rights over its competitors.com made its debut as a broad educational service that combines high-quality reference materials with electronic curriculum programs designed to make learning engaging and enjoyable. Internet-based ﬁrms that are more agile and innovative than the giants is upsetting many a corporate applecart. Just as Microsoft could appear from virtually nowhere to usurp the market of mighty IBM. The company is also actively syndicating some of its more popular features throughout the Internet. Analysis The arrival of new. and yet the company’s leaders did seem to assume that they were impervious to external developments. This process will accelerate as more and more companies join the e-commerce bandwagon.ORGANIZATIONAL BEHAVIOR IN PRACTICE
Add to the equation the enormous cost advantage enjoyed by Encarta which can be produced for around £1 a copy. These days. so a few years later Netscape appeared overnight and threatened to undermine the market (and the size) of Microsoft. In 2001. The Internet is helping to put small. the deeper question is not simply what mistakes the company made.
The Q12 questions According to Marcus Buckingham. do my opinions seem to count? 8 Does the mission or purpose of my company make me feel that my job is important? 9 Are my co-workers committed to doing quality work? 10 Do I have a best friend at work? 11 In the past six months. has someone at work talked to me about my progress? 12 This past year. project leader Marcus Buckingham and his team distilled 12 core issues (called the ‘‘Q12’’) that act as an effective barometer of the strength of any work unit.64
GALLUP’S PICTURE OF ORGANIZATIONAL HEALTH A recent issue of Fast Company8 magazine reported how The Gallup Organization undertook an exercise to process 30 years’ worth of data on worker attitudes to try and answer one simple but crucial question: ‘‘What does a strong and vibrant workplace look like?’’ From their analysis. seem to care about me as a person? 6 Is there someone at work who encourages my development? 7 At work. these are the 12 factors that determine whether people are engaged. or actively disengaged at work. or someone at work. have I received recognition or praise for doing good work? 5 Does my supervisor. not engaged. do I have the opportunity to do what I do best every day? 4 In the past seven days. 1 Do I know what is expected of me at work? 2 Do I have the materials and equipment that I need in order to do my work right? 3 At work. have I had opportunities at work to learn and grow?
Sears’ job as station agent left him plenty of spare time. Buckingham found some of the mostengaged groups and some of the least-engaged groups working within the same company. Today. Sears set up a mail order business in the 1890s. and automotive business.
SEARS The organization The company’s history dates back to the 1880s. Its unproﬁtable catalog merchandise distribution operations were also
. On top of that. In other words. The story In 1992. the Sears Merchandise Group. reorganized around its apparel. to work. and 27% more likely to report higher proﬁtability. CEOs typically were not aware who in their company was engaged effectively and who wasn’t. numbers rapidly grew and by 1997 there were over 800 stores. so he sold lumber and coal to local residents on the side to make extra money.ORGANIZATIONAL BEHAVIOR IN PRACTICE
Next. 56% more likely to have higher-thanaverage customer loyalty. Minnesota. home. They found that the most ‘‘engaged’’ workplaces were 50% more likely to have lower turnover. the company’s mission statement is: Sears: a compelling place to shop. when Richard Sears was an agent of the Minneapolis and St Louis railway station in North Redwood. 38% more likely to have above-average productivity. As part of this restructuring. the team set about analyzing how the answers given to the Q12 linked to concrete business effectiveness measures. The company opened its ﬁrst retail store in 1925. closed many of its under-performing department stores as well as its specialty stores. Buckingham’s team made another startling discovery: there was more variation in scores within companies than between companies. Sears announced it would again reshape the company to give it greater strength and marketing focus and to give its shareholders a better return on investment. and to invest.
Led by CEO Arthur Martinez. In rethinking what Sears was and what it wanted to become. But Sears’ transformation was more than a change in marketing strategy. This cultural change is now spreading throughout the company. Narasimhan. It was also a change in the logic and culture of the business.’’ C. modelling.9 SUNDARAM-CLAYTON LIMITED ‘‘Our human resources and learning from the best practices across the world has made us an organization poised for a quantum leap. Sears has radically changed the way it does business and dramatically improved its ﬁnancial results. With a commitment of total satisfaction to customers. President. and experimentation Sears not only achieved this but also changed the way in which mangers think and behave. One problem for Sears was measuring such soft data as ‘‘customer satisfaction. Analysis Over the past ﬁve years. leaving a smaller – but successful – direct-response business. Sundaram-Clayton Ltd (SCL) is an Indian company that has pioneered the manufacture of air-assisted and air brake systems for home-based commercial vehicles.’’ However. these managers developed a business model of the company and an accompanying measurement system that tracks success from management behavior through employee attitudes to customer satisfaction and ﬁnancial performance. Sundaram-Clayton Limited The organization Established in 1962 in collaboration with Clayton Dewandre Holdings plc. a group of more than 100 top-level Sears executives spent three years rebuilding the company around its customers. The company has been rebuilt around its customers using a business model and accompanying performance measures that track success through employee attitudes to customer satisfaction and ﬁnancial performance. by means of an ongoing process of data collection.66
closed in 1993. the company has achieved a share of business in
we take our responsibilities as a corporate citizen seriously by contributing actively to the development of the local communities. and reliability have instilled in us the strength to drive on the export market with conﬁdence. service. the examination procedures and selection process for the award are exacting and elaborate. Total Quality Management is a way of life with us.’’ SCL’s commitment to enhancing customer satisfaction through continuous improvement and total employee involvement led the company to a signiﬁcant milestone – The Deming Award. and so it was a real achievement for SCL. Our dedication towards customer satisfaction has enabled us to stay ahead of competition. We are committed to being a proﬁtable and socially responsible leading manufacturer of environmentally friendly auto components and sub-systems for customers in global markets and to provide fulﬁllment and prosperity for customers.ORGANIZATIONAL BEHAVIOR IN PRACTICE
the Original Equipment segment of over 85% and a market share in the sales aftermarket of around 75%. SCL’s Brakes division was awarded the prestigious prize for achieving ‘‘distinctive performance improvement through the application of company-wide quality control. At SCL.
. and the ﬁrst in India. employees and vendors. The company’s commitment to TQM is very apparent from its mission statement: ‘‘We at SCL are all set to lead the automotive air braking business in Asia with a foundation built on continuous innovation and commitment to uncompromising quality. In 1998.’’ As most people know. SCL respects the individual and believes in encouraging its employees by creating the ambience they need to achieve self-actualization. Our principles of quality. The story This is the story of a company operating in a country without a strong track record in manufacture that has pursued Total Quality Management (TQM) principles to become globally recognized. particularly as it was only the fourth organization in the world outside Japan to win this prize.
everything was secret’’ from the workers.’’ It is this borrowing and incorporating of best practices from around the world that has enabled the company to escape a national attitude personiﬁed by Nehru’s famous comment. This is how the Economist describes Jagadeesan’s transformation: ‘‘Before. has itself incorporated total quality management principles in its tiny factory in Chennai.W. and this. but also
. which means that they. are in charge of quality control. Under pressure from SCL to upgrade their quality and speed up deliveries without raising prices. According to C. the management at Jagadeesan realized that this could only be achieved by abandoning a traditional set of management practices that F. ‘‘has made us an organization poised for a quantum leap. says J. Tremendous importance is accorded on the training and retraining of not only our employees but also our vendors and end-users. Selvam. An approach SCL calls Total Employee Involvement (TEI) forms the base of the company’s quest for excellence through TQM. a 32-employee strong company whose only customer is SCL. one of Jagadeesan’s owners. says Narasimhan. Although its quality systems have attracted most public attention. SCL has a people-centric outlook.’’ SCL believes differently. not a supervisor. Narasimhan. A report in the Economist 10 tells how Jagadeesan Industries.’’ The company has also heavily inﬂuenced the work practices of its Indian suppliers. president of SCL: ‘‘At SCL we are poised to achieve breakthroughs by realizing the importance of continuously honing the expertise of our human resources and learning from the best practices across the world.68
Analysis For years. Taylor would have recognized and doubtless approved of. Now the workers have a lot more information: not only on matters relating to their own jobs. India’s reputation for manufacturing has been undermined by Nehru’s declaration that ‘‘It is better to have a second-rate thing made in one’s own country than a ﬁrst-rate thing one has to import. Machine operators have ‘‘ownership’’ of the components they make.
but they are now supplied with uniforms and meals and such formal-sector beneﬁts as contributions made for them to the public-sector pension scheme. scientiﬁcally based principles that can serve as a compass to guide society towards a just and sustainable future.000 people. TNS has ofﬁces in Australia. South Africa. communities. doctors. New Zealand. has formed a large-scale social and environmental movement called The Natural Step. government entities. academia. Today. The associations and their members co-operate on projects that work towards developing a sustainable society. The Natural Step offers a framework that is based on science and serves as a compass for businesses. and the United States. the United Kingdom. KarlHenrik Rob`rt describes how sustainability provides a shared sense of e purpose that binds the associate members together. They are paid unprincely salaries of 900–2750 rupees. while the leaves represent the various efforts we can take to meet the principles. A system is like a tree – the trunk and the branches are the underlying principles that give form and structure to the system. ‘‘What binds [us] together is a collective understanding of the larger system of which we are a part. involving some 10. says Mr Selvam. THE NATURAL STEP The organization The Natural Step (TNS) is a non-proﬁt environmental education organization working to build an ecologically and economically sustainable society.ORGANIZATIONAL BEHAVIOR IN PRACTICE
on the ﬁrm’s turnover and proﬁts. providing input
. Japan. Canada.’’ The story In Sweden. The stated purpose of TNS is ‘‘To develop and share a common framework comprised of easily understood. ‘‘The various associations – the engineers and scientists. Sweden. and individuals working to redesign their activities to become more sustainable. a group of professional associations. and lawyers – are each operating as the leaves. allowing them to create large-scale change.
while the trunk provides an overarching unity to our work. Nancy Kline has developed a system called a Thinking EnvironmentTM . and by business corporations. TNS encourages dialog and consensus-building. Here. a key process of learning organizations. It gives people a common language and guiding principles to help change existing practices and decrease their impact on the environment.70
from their background. Analysis It is the ability of an organization to create a shared sense of purpose and vision that enables large numbers of people to work together in a co-ordinated way. True vision occurs only when an organization really understands where it wants to go and these aspirations become its primary organizing principle. reduce the use of natural resources. for the development of consensus documents (e. in a
. and forestry). The system conditions have been used as a shared mental model for problem-solving. and other organizations as an instrument for strategic planning towards sustainability. develop new technologies. a model of human interaction that dramatically improves the way people think – and thus work and live. energy. and facilitate better communications among employees and members. sustainable practices with regard to metals.g. focusing on ﬁrst-order principles at the beginning of cause–effect relationships.’’11 The Natural Step Framework helps individuals and organizations address key environmental issues from a systems perspective. municipalities. to structure institutional scientiﬁc work at universities and in course curricula for the teaching of students. The Natural Step Framework is based on systems thinking. CORE SKILLS IN PRACTICE: THINKING BETTER BY LISTENING MORE ATTENTIVELY Over the past 17 years. Listening – deﬁned by Kline as the quality of people’s attention for each other – is the core of this method. agriculture.
ORGANIZATIONAL BEHAVIOR IN PRACTICE
brief extract from her book Time to Think. ‘‘The Staples manager poses two questions: ‘‘1 What have you noticed that needs attention or change in this company that I might not have noticed? ‘‘2 What do you think should be done about it? ‘‘Then she sits down and listens. the better you can think. asks clarifying questions only. This takes time. She gathers them in groups of about 12 (which. a bi-monthly meeting with all levels of her staff. but she claims it has gained time overall because
. however. is about as big as you can make a group and still expect it to be safe enough for people to say what they think. She does not promise to do everything people suggest. Most people will not stand up to speak in a group of colleagues that large). but she does agree to let them know what she decides to do with their ideas and why. not holding an open consultative forum at all. the ofﬁce supplies company. have less chance of thinking well than most of the people junior to them – but the assumption persists nevertheless. She promises to think about each one. Organizations that gather 200 employees to announce policy changes and then open the ﬂoor to questions and comments from the audience are. in effect. Everyone speaks without rush or interruption. can talk themselves into lucidity: ‘‘Organizations intimidate people into believing that ‘the higher up you are in a hierarchy. She has institutionalized equality of thinking in the workplace. because of their isolation from what is really happening. does not challenge their ideas or defend herself. One of the divisional managers has done a good thing. The absurdity of this is obvious – often the people near the top. She has set up a forum for ideas. by the way.12 is an example of how people. when managed effectively. at Staples.’ And welding this assumption to the ﬂoor of the mind of managers is the assumption that to seek out ideas from people junior to you is to look incompetent. She makes notes. ‘‘Not.
‘‘Equality is particularly a feature in any Thinking Environment meeting. and if their companies are successful. that propels signiﬁcant cultural change When all is going well for a business. Likewise.’’
BEST PRACTICE: PULLING IT ALL TOGETHER So what can we conclude from the case studies in this section? Here are ﬁve key themes that run through the examples we have looked at. Companies mirror their founders Edgar Schein has described how organizations start with founders and entrepreneurs whose personal assumptions and values gradually create a certain way of thinking and operating. those ways of thinking and operating come to be taken for granted as the ‘‘right’’ way to run a business. It is crisis. Michael Dell’s personal stamp is all over his company. new paths she had never thought of have opened up. not comfort. The chair or other people in authority may have to make the ﬁnal decisions. Encyclopaedia Britannica needed to be shaken up by a competitor before it could accept the reality that longevity is no guarantor of survival. The management at Jagadeesan seemed perfectly happy with their former set of working practices until they came under pressure from SCL to make a step improvement in the quality of service provided for no extra cost. But the chance to contribute ideas and points of view is given equally in a Thinking Environment. everyone has a turn to speak. Many times during the meeting. not every meeting can work effectively on consensus. and employee involvement and commitment have increased – those two unmeasurable soft qualities on which so much of the hard stuff depends. including at the beginning and at the end. changing the formula is often the last thing on anybody’s mind. Every person is considered equally valuable.
embers have been snuffed before they combusted.
. In the ﬁnal analysis. the focus was on culture. Locke. except in relation to what the organization is trying to do. A team of ﬁre ﬁghters will necessarily have a different set of operating patterns to an advertising agency. 2 Levine. Searls. credible. Jossey-Bass. SCL achieved success by pursuing quality standards and adopting Western management practices.ORGANIZATIONAL BEHAVIOR IN PRACTICE
Achieving business success requires a sense of purpose ﬁrst and good management practices second An organization is not a club – its purpose is not solely to look after the well-being of its members. this doesn’t make one environment automatically ‘‘better’’ than another. San Francisco. others prefer to pursue roles requiring a high level of technical competence. Even though our personality and preferences might make us better suited to work in some places rather than others. C. R. In some cases. NOTES 1 Schein. and – most crucial of all – able to be readily applied.. D. D. the need is to focus on dangers within the organization. Some people look mainly for a sense of security and stability. Some want to manage people and resources. For Dell. different people look for different things out of their careers. New York. Perseus Publishing. On a similar tack. Different strokes for different folks Organizations achieve success in very different ways and by focusing on what is most important to them. (2000) The Cluetrain Manifesto: The End of Business as Usual. the enemy was mindset. & Weinberger. 2nd edn. The best ideas poorly executed are worthless. For Encyclopaedia Britannica. organizational success comes down to implementation. Let’s do this thing Successful companies are those that came up with a way forward that is timely. There is no such thing as the ideal set of organizational behaviors or management practices. E. while others seek out roles with a high level of challenge. (1992) Organizational Culture and Leadership.
R. A. K.’’ Harvard Business Review. January–February. Taken from LaBarre. Kirn.P. P. (www. (1999) Direct from Dell.’’ Fast Company.
. London.-H.J.. S. M.’’Fast Company. October. & Quinn. p. New York. Ibid.’’ The Systems Thinker.88. please refer to: Rucci. (2001) ‘‘Marcus Buckingham thinks your boss has an attitude problem. (1999) ‘‘Talent – Andy Esparza. For more background. 2 June.’’ Economist. Taken from Salter. Ibid.com/displayStory. HarperCollinsBusiness. Ibid. Kline.216.74
3 4 5 6 7 8 9
Dell. August. Ward Lock. p. (1995) ‘‘The natural step: a framework for large-scale e change. N. C. See (2001) ‘‘The unknown majority.T (1998) ‘‘The employee-customer proﬁt chain at Sears.cfm?Story ID=S%26%288%20% 2BRQ%23%20%0A) Rob`rt.economist. (1999) Time to Think. December.
» Key thinkers.10.Key Concepts and Thinkers
» Glossary of organizational behavior.08
knowledge is carefully codiﬁed and stored in databases. or feel within an organization. They include: the physical environment. with the result that the value of process redesign has been tarnished in the eyes of many managers. a collection of loosely related or even unrelated streams of scholarly and not-so-scholarly research.76
‘‘Organizational behavior is in reality a hodgepodge of various subjects. procedures. It should not be confused with crude cost-cutting exercises (such as downsizing). and predeﬁned routines are dominant. and so on. although many organizations have used both approaches simultaneously. In a bureaucracy. The term has come to be associated with organizations which have over-complicated procedures and trivial rules. Adhocracy – A non-bureaucratic networked organization with a highly organic organizational design. commonly used language and jargon. Artifacts – Artifacts are everything we might see. rules. laws. Codiﬁcation strategy and personalization strategy – Part of the burgeoning language of knowledge management. the theory and practice of organizational behavior have a language all their own. status symbols such as cars. rituals and ceremonies.’’1 Jack Wood GLOSSARY OF ORGANIZATIONAL BEHAVIOR Like many other business subjects. Business process redesign – This involves changing both organizational structure and processes to ensure that future customer needs can be anticipated and fulﬁlled in the most cost-effective manner. job titles. the way people dress. published documents.
. Bureaucracy – A term coined by Max Weber. where it can be accessed and used again and again by anyone in the organization. Here is a selective glossary of some of the key terms. In companies that sell relatively standardized products that ﬁll common needs. all visible behaviors. and the exercise of ‘‘due process’’ all important. the technology used. hear. rather than through formal courses. Action learning – Term coined by Reg Revans to describe an approach in which learning is installed by dealing with real life business problems. key concepts and key thinkers associated with the subject.
to describe those elements of organizational culture that are. professor of organization development and psychology at Loyola University of Chicago. not in the public consciousness of members of the institution. not written down. communities of practice are voluntary. a software company had 10 out of 11. In companies that provide highly customized solutions to unique problems.000 employees. and a transportation group deemed 20 of its 33. authors of Competing for the Future.KEY CONCEPTS AND THINKERS
This is a codiﬁcation strategy. and are responsible only to themselves. typically of their own accord. not celebrated in some public way. Bill Gates has reﬂected that if 20 people were to leave Microsoft. in his words ‘‘not in the private consciousness of the members of the institution. the chief purpose of computers is to help people communicate. Prahalad.K. a computer ﬁrm recognized 100 ‘‘core competents’’ out of 16. there is no one best way to organize how a business operates. This is a personalization strategy. knowledge is shared mainly through person-to-person contacts. not named or noted in some public forum. only partially understood. Covert culture – Term coined by Gerard Egan. they can be viewed as subversive. the company would risk bankruptcy. not challenged or perhaps not
. Gary Hamel and C. longer-lived. Each organization has to address its own unique set of circumstances. deﬁne core competencies as ‘‘a bundle of skills and technologies (rather than a simple or discrete skill or technology) that enables the company to provide a particular beneﬁt to customers. where members are drawn to one other by a common set of needs that may be both professional and social. In a study by the Corporate Leadership Council. have no speciﬁc deliverable.000. Contingency theory – According to this theory. Compared to project teams. Communities of practice – Groups that form within an organization.000 as really critical. not discussed in any public forum.’’ Core competents – The small number of people in an organization who are absolutely vital to that organization’s success. Because they are free of formal strictures and hierarchy within an organization. Core competencies – The key strengths of an organization (sometimes called distinctive capabilities).
Distinctive capabilities – See Core competencies Downshifting – The deliberate decision by somebody to simplify their life by. Downsizing – Restructuring an organization in a declining market where the level of resources (manpower. It is much easier to hire people with those traits than to change their personalities. structures. Listen for cultural ﬁt: you may be hiring the technical or professional skills you need but damaging your chances of building a strong culture. etc. Cultural web – A useful concept in which the organization is understood in terms of the routines. for example. stories. Desk rage – Long hours and the growing pressures of the workplace are leading to increasing outbreaks of ofﬁce strife or ‘‘desk rage. Culture carriers – People in an organization that is going through a period of change who see the new direction and feel comfortable moving in that direction. and systems that exist within it. Discontinuities – One-off changes in the marketplace that force radical organizational change. It can be used to elicit the organizational paradigm because each component of the cultural web provides clues about taken-for-granted organizational assumptions. Ask questions in the interviews and listen carefully to their stories about previous work experiences. beliefs. Cultural integration – Some companies have a strong dominant culture that is pervasive throughout the organization across business units and regions.’’ As stress builds in the ofﬁce. balancing work and home life. at the expense of income. An organization of this type is said to possess a high level of cultural integration.78
even open to challenge. and behaviors once they are hired.
.’’ Cultural ﬁt – Building and sustaining a corporate culture that ﬁts your needs requires a critical mass of employees who are committed to the culture’s core beliefs and values.) are inappropriate to meeting current customer needs. or reducing levels of ﬁnancial commitment. considered undiscussible in public forums and at times so undiscussible that even their undiscussibility is undiscussible. workers are increasingly venting their frustrations on colleagues. rituals. support functions.
Informate – Term coined by Harvard academic Shoshana Zuboff to describe the capacity for information technology to translate and make visible organizational processes. Hierarchy – A system for classifying organizational roles and the people who ﬁll them in terms of their rank or importance. as suggested in the scientiﬁc management approach. Human relations draws its inspiration from biological rather than engineering systems. These moments of discrepancy between what an organizations says it believes and what it does in practice are in themselves highly indicative of the type of organizational culture that prevails. or in the content of the corporate mission statement. an espoused value that open communication is important may show itself in the form of regular brieﬁngs for employees. Human Relations Movement – In part a reaction to the scientiﬁc management school. but rather that workers were also interested in the rewards and punishments of their own work group. or the way an ofﬁce is laid out.KEY CONCEPTS AND THINKERS
E-lancers – Independent contractors connected through personal computers and electronic networks. Force ﬁeld analysis – A technique which enables the factors supporting and working against change to be identiﬁed and assessed in terms of their signiﬁcance. advocates of this approach emphasize people rather than machines. Sometimes. behaviors. Espoused values – This is what an organization says it believes. Sometimes this will be manifest in the artifacts of the organization. Emotional intelligence – A concept popularized by Daniel Goleman that refers to our capacity for recognizing our own feelings and those of others. a process that has been accelerated by the impact of information technology. these values will be espoused but not enacted. for motivating ourselves. however. These electronically connected freelancers join together into ﬂuid and temporary networks to produce and sell goods and services. and for managing emotions in ourselves and in our relationships. for example. these landmark studies showed how work groups didn’t respond to classical motivational approaches. Globalization – The integration of economic activity across national or regional boundaries. and events. Hawthorne studies – Conducted in the 1920s. objects.
operational improvement. Examples include the way in which we copy ideas. Knowledge management – A system. songs. Although the choice of speciﬁc indicators will depend on the unique circumstances of the organization. information. to share information in a company with the goal of increasing levels of responsiveness and innovation. competing to get into our brains and minds. and cultural diagnosis. etc. and where people are continually learning how to learn together. Memes are replicators and are all around us in our everyday lives. product and service innovation. behavior. most often computer-based. inventions. Key Performance Indicators (KPIs) – Normally combined as a basket of measures to cover all critical areas of the organization. where new and expansive patterns of thinking are nurtured. and stories from one another. where collective aspiration is set free. KPIs are generally selected from the following categories of information: customer satisfaction. intellectual property.’’ He also acknowledges that the idea of a learning organization is a vision. Learning organization – Peter Senge characterizes learning organizations as places where ‘‘people continually expand their capacity to create the results they truly desire. catch-phrases. the cultural adaptability of the organization to new opportunities. Meme – First coined by Richard Dawkins when updating Darwin’s theory of natural selection in his groundbreaking book The Selﬁsh Gene (1976).80
Intellectual capital – Intellectual material knowledge. experience that can be put to use to create wealth. the sum total of what employees in an organization know that gives it a competitive edge. In a business context. These factors include the level of resources available. Internal capabilities or competencies – What the organization is good at. ﬁnancial health. Something an organization can do that its potential competitors cannot. employee morale and commitment. knowledge of new markets and products.
. or skill that can be transferred from one person to another by imitation. a meme is an idea. Internal constraints – Factors that can inhibit an organization’s ability to achieve desired outcomes.
perceptions and practices shared by a community which form a particular vision of reality and collective mood that is the basis of the way that the community organizes itself. and principles from such disciplines as psychology. and (3) managed from the top. missions. but puts particular emphasis on shared. basic assumptions held by the member of the group or organization. therefore. Schein’s deﬁnition brings together many of the ideas and concepts expressed in that earlier list of deﬁnitions. sociology. learning capabilities. and feel in relation to those problems. writing in his book Organization Development: Strategies and Models.’’ Paradigm – A constellation of concepts. values. Motivation – The internal needs that drive or energize behavior. taken-for-granted.KEY CONCEPTS AND THINKERS
Micro-careers – With the death of the job-for-life went the notion of getting paid to do broadly the same thing throughout your working days. Organizational behavior (OB) – The study of human behavior. to be taught to new members as the correct way to perceive. as ‘‘a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration. Organizational culture – Deﬁned by Edgar Schein. ‘‘OD is an effort that is (1) planned. that has worked well enough to be considered valid and.’ using behavioral-science knowledge. and actions while working with groups and within the total organization. to increase (4) organizational effectiveness and health. a professor at MIT who is considered one of the ‘‘founders’’ of organizational psychology. and strategies. through (5) planned interventions in the organization’s ‘processes. OB also can involve analyzing the external environment’s effect on the organization and its learning resources. as in a ‘‘Put Your Money Where Your Mouth Is Company. values. methods. Organization development (OD) – According to Richard Beckhard. Micro-careers are those distinct and separate chunks of activity that will characterize an individual’s working life in the twenty-ﬁrst century. and cultural anthropology to learn about individual perception. attitudes and performance within an organizational setting. PYMWYMIC – A company that acts according to its values and beliefs. (2) organizationwide. think.’’
. OB draws on theory. objectives.
competitor analysis. the culture in large organizations is not pervasive. or merely reading trade magazines). The seven are: strategy. It is no longer ‘‘their company. method. technique. devised by Richard Pascale and Anthony Athos. singular. skills. ‘‘Skills’’ is placed center-stage because it is both ‘‘hard’’ and ‘‘soft.’’ it becomes ‘‘our company. Taylor that involved detailed observation and measurement of even the most routine work to ﬁnd the optimum mode of performance. style. structure. strategy. shared values. These subcultures can function co-operatively or be in conﬂict with each other. structure. Subcultures may share certain characteristics.82
Reality check – A reality check is any tool. that evaluates organizations under seven key headings to which managers need to pay attention. systems. Theory X and Theory Y – Based on research conducted by Douglas McGregor. values. employee feedback. this theory suggests that managers are likely to believe one of two sets of assumptions about human behavior. A Theory X manager believes that work is inherently distasteful to most people.e. a shared vision changes people’s relationship with the company. Subcultures – Very often. and beliefs or be totally different.’’ comprising both the distinctive capabilities of key personnel and the core competencies of the organization as a whole. Shared vision – In a corporation. that people are not creative or ambitious and that they need to
. In these organizations. and so on) and many others that are not (customer research. or device used by an individual or organization to provide feedback on their place in the world. staff. norms. Seven S model – Widely used analytical tool. Scientiﬁc management – An approach to work devised around a century ago by F. It creates a common identity. and systems) and some are ‘‘soft’’ (style. Some of these areas are ‘‘hard’’ (i. and staff.’’ A shared vision is the ﬁrst step in allowing people who mistrusted each other to begin to work together. there is not one single culture but a collection of subcultures. Reality checks include tools and techniques that are recognized as ‘‘strategic’’ (such as industry analysis. Taylor advocated the use of time-and-motion study as a means of analyzing and standardizing work activities. and shared values).W. or uniform.
For example. These deeply-held assumptions are rarely articulated and even more rarely are they questioned unless some form of organizational crisis forces their re-examination. he still commands more respect than affection in some quarters and even that respect is tempered by a sense that his work lacks academic credibility. Theory Y managers take the view that people can be self-directed and creative at work if properly motivated. it quickly becomes a wish-driven strategy meritorious in all respects except for the fact that it will never be achieved. KEY THINKERS The following have been particularly inﬂuential in the ﬁeld of organizational behavior.KEY CONCEPTS AND THINKERS
be closely managed by a mix of control and coercion. Now in his nineties. and networks. Interestingly. the management business has boomed. Since then. and only three academic courses that covered the subject. Drucker. a company’s deeply-held belief that the customer should always be treated with respect would render it almost impossible that organizational employees would set out to deliberately rip off customers. If not. Underlying assumptions – Basic assumptions that have become so taken for granted that people in the organization would ﬁnd it inconceivable to base their behavior on anything else. in the words of the Economist. Virtual organization – An organizational form that consists of a loose (and often temporary) combination of technology. Many of their contributions are mentioned elsewhere in this book. of course. expertise. Vision – A company’s view of its future that is compelling and stretching. A corporate vision for the future has to be grounded in awareness. ‘‘the greatest thinker management theory has produced. Peter When Peter Drucker wrote The Concept of the Corporation in 1945. but that is also viewed as achievable. he could ﬁnd only two ﬁrms that offered management training to their staff. In contrast. and Drucker has gone on to become. it is largely
.’’ Opinion has long been divided about Drucker.
Fayol believed. Perhaps that is because he has always written from the standpoint that the world of work is essentially about human endeavor. Many practicing managers today would probably identify similar elements as the core of their activities. Fayol. Hofstede is currently Emeritus professor of organizational anthropology and international management at Maastricht University. Hofstede. broadcaster. commercial. He is best known for his work on four dimensions of cultural variability. Frederick In his book Motivation to Work (1959). Geert Born in the Netherlands in 1928. he anticipated the growth of outsourcing. General and Industrial Management. the intellectual capital movement. consisted of planning. he also foresaw how these developments might impact on the individual. It was his concept of the portfolio worker that arguably provided a way forward for the downshifting movement of the 1990s. accounting. published in 1916. and the rise of knowledge workers inter alia. Henri Perhaps more than anybody. In his 1989 book The Age of Unreason. commonly referred to as Hofstede’s Dimensions. Charles Writer. and self-styled social philosopher. Fayol also characterized the activities of a commercial organization into six basic elements: technical. ﬁnancial. Henri Fayol (1841–1925).84
in the community of practicing managers that Drucker’s reputation has been built. Herzberg. a mining engineer and manager by profession.
. telecommuting. security. Herzberg coined the terms hygiene factors and motivational factors as a basis for exploring what motivated people to work well and happily. co-ordinating. deﬁned the nature and working patterns of the twentieth-century organization. and management. and controlling. organizing. In his book. The management function. lecturer. Handy. commanding. Fayol laid down 14 principles of management (see Chapter 3).
Morgan is a best-selling author. etc. Elliott For over 50 years. his psychological perspectives on management. are still studied today in business schools all over the world. he explores a rich and range of metaphors (organizations as organisms. for example. Morgan. He argues that there is a ‘‘widespread. Maslow’s most inﬂuential business book. almost universal.’’ He believes. such as the hierarchy of needs. likening an organization to a machine – can be helpful in revealing aspects of organizational life. Abraham One of the most widely-known experts on human behavior and motivation. Now a leading business
.). Jaques has consistently advocated the need for a scientiﬁc approach to understanding work systems. underestimation of the impact of organization on how we go about our business. Maslow. as psychic prisons. speaker. Gareth A Professor at York University in Toronto. In his book Images of Organization. For the use of metaphor implies a way of thinking and a way of seeing that pervades how we understand our world generally. particularly in the ﬁeld of hierarchy – of which Jaques is a fan. Richard Pascale was a member of the faculty of Stanford’s Graduate School of Business for 20 years. that rapid change in people’s behavior is achieved less through altering their psychological make-up and more by revising organizational structures and managerial leading practices. He argues that the use of metaphor – for example. as brains. but for those who persist there is a wealth of challenging material that undermines much conventional organizational wisdom. is a stimulating but not always easy read that demonstrates clearly why he was an unparalleled thinker and innovator in applying human behavior to the workplace. as cultures. as political systems. His book Requisite Organization challenges many current assumptions about effective organizations. Some ﬁnd his theories indigestible.KEY CONCEPTS AND THINKERS
Jaques. Eupsychian Management. and consultant on managing change. Pascale. Richard Born in 1938.
his work has explored the nature of the psychological contract between employer and employee.’’ Taylor’s work with car-making legend Henry Ford led directly to the mass production techniques that created 15 million Model Ts between 1910 and 1927. Edgar Born in 1928. London. (ed. Tom Former McKinsey consultant and co-author (with Bob Waterman) of In Search of Excellence (1982). and that set the pattern for industrial working practice worldwide. G. as the father of bureaucracy. unfairly. Managing on the Edge (1990).). pp.
. Edgar H.’’ In: Bickerstaffe. Mastering Management.86
consultant. Taylor. and also career anchors – the idea that we each have an underlying career value that we are unwilling to give up. he has written or co-authored three highly challenging books – The Art of Japanese Management (1981).217–224. and a Professor at the MIT Sloan School of Management. J. FT/Pitman Publishing. Max Weber (1864–1920) was a German university professor who was the ﬁrst person to describe organizations as having the qualities of a machine. the most popular management book of recent times with global sales of over six million copies. Schein. and Surﬁng on the Edge of Chaos (2000). Weber is sometimes described. NOTE 1 Wood. Peters. (1997) ‘‘Deep roots and far from a soft option. More recently. a metaphor that persisted throughout the twentieth century. Frederick W The world’s ﬁrst efﬁciency expert and ‘‘the father of scientiﬁc management. Weber. Schein is sometimes seen as the ‘‘inventor’’ of the idea of corporate culture.
10. and Websites. magazines. » Articles.
» Books. » Journals.09
It examines the conﬂicts that every manager faces and presents an unorthodox yet practical way for managers to think about and resolve them. The book sets out a number of ways in which people can handle difﬁcult situations at work more effectively. Dilbert has become an essential part of their lives. irreverent. For those who ﬁnd handling awkward situations. Maidenhead. and Websites. and a mouthpiece for their unvoiced concerns and feelings. a touchstone with reality when the world around them seems to be going crazy. This chapter identiﬁes some of the best resources around. & Back. Not since the early days of The Far Side by Gary Larson has there been a cartoon strip to match Dilbert. and a ﬂexible framework that managers at all levels
. Equally. sample one of the Dilbert anthologies (Build a Better Life by Stealing Ofﬁce Supplies is a very good starting point) and you will soon be smitten. MA. J. Drawing on philosophy and literature. journals and magazines. » Back. this is one of the best introductions to assertiveness techniques around. (1997) Deﬁning Moments. literally thousands of books have been published directly or indirectly about human behavior within organizations. a mouthless. McGrawHill. » Badaracco. K. K.88
Countless words have been written about what goes on in and around organizations. and built around three stories of reallife quandaries of increasing complexity that managers have faced as their careers have advanced. S. bespectacled computer nerd whose observations on modern business life are poignant. Deﬁning Moments is a book about work and life choices and the critical points at which the two become one. there are plenty of practical tips and suggestions for the more self-conﬁdent. Harvard Business School Press. the book provides tangible examples. well. Boston. HarperBusiness. (1991) Assertiveness at Work. articles. awkward. (1996) The Dilbert Principle. Here is a list of some of the best: » Adams. UK. BOOKS: AN ANNOTATED BIBLIOGRAPHY Over the years. If you are not familiar with the work of Scott Adams. and painfully funny. including books. New York. For workers around the world. actionable steps.
» Chandler. Oxford. a team of seven women who work as community midwives. Ever apologized even when you haven’t done anything wrong? Do you have friends who outstay their welcome? Is it you that normally gets stuck with the party bore? Been overlooked for promotion? If you’re nodding at this point. author of The Fifth Discipline (the ﬁrst book to popularize the concept of the learning organization). and the implicate order. Simon and Schuster. » Bohm D.E.) (1998) On Creativity. it is worthwhile pointing out that Peter Senge.’’ this book sets out to show you how to stand up for yourself and put your own needs ﬁrst. R. A. the authors have in the
. the chances are that you’re too nice for your own good. London. Routledge. Much of the material draws overtly from Bohm’s perceptions as a practicing scientist. but for anybody looking for a one-stop overview of the subject. (1997) The Nice Factor Book. (ed. (1999) Smart Things to Know about Teams. Those with a particular interest in the use of dialog as a mode of learning and enquiry will be fascinated by the chapter entitled Art. A collection of ﬁve previously unpublished or unavailable essays on the nature of creativity by the late and distinguished physicist David Bohm. London. Capstone. Smart Things to Know about Teams probably can’t be bettered. Although much of the content of the book is reminiscent of the sort of stuff covered on assertiveness or self-esteem workshops. has publicly credited Bohm with inﬂuencing his thinking about team learning. dialogue. Smart Things to Know about Teams is an intelligently assembled overview of the latest thinking about teams and team working.RESOURCES
can use to make the choices that will shape not only their careers but their characters. L. » Caracciolo. Described as ‘‘the ﬁrst antidote to the national plague of overniceness. In case you are wondering why a book like this could possibly be of interest to the business community. Annemarie Caracciolo clearly knows her topic and draws eclectically on a wide range of sources – from Senge to St Luke’s and from Warren Bennis to The Bishopston Team. J. Those readers who are already steeped in the subject may ﬁnd little in the book that is truly groundbreaking. Nichol. & Grzyb.
& Sawaf. R. Booz prize for Most Insightful Management Book back in 1997 and so it is a little disappointing that his ideas have not yet broken through into the mainstream. London. (1999) Dialogue at Work. The living company. Lemos & Crane. he says.90
concept of ‘‘niceness’’ an original and very accessible vehicle for putting over their brand of effective relationship management.M. Readers have the opportunity to map their own emotional intelligence by completing a questionnaire at the back of the book. Orion Business Books. the ‘‘normal’’ way that we have of talking at each other. decision making and individual success than is commonly acknowledged. Dialog is the capacity of members of a team to suspend assumptions and enter into a genuine ‘‘thinking together’’ which leads to shared meaning and allows the group to discover insights not attainable individually. anybody with an interest in organizational learning will ﬁnd something of value here. Executive EQ (the initials stand for emotional quotient) argues that emotional intelligence will be a new driving force in business. Nonetheless. London. Nancy Dixon explores the contribution that dialog can make to a change management process. adapt. Arie de Geus – the man widely credited for originating the concept of the ‘‘learning organization’’ – believes that most companies fail because they focus too narrowly on ﬁnancial performance and pay insufﬁcient attention to themselves as communities of human beings with the potential to learn. Whether this will prove to be the case is open to question – most organizations are still not noted for their emotional maturity – but this is a self-help book with enough business examples to give the idea credibility. and grow. published in 1996. In this book. (1997) The Living Company. N. » Dixon. London. Drawing on unpublished research conducted by Shell in the early 1980s. which literally means heaving our separate ideas back and forth in a kind of winner-takes-all competition. De Geus won the Edwin G. A. claims that our emotions play a much greater role in thought. » Cooper. This contrasts with discussion. Nicholas Brealey. emphasizes knowledge rather than capital. and adaptability rather than core competencies. Daniel Goleman’s best-selling Emotional Intelligence. (1997) Executive EQ. The book is relatively
. A. » de Geus.
short but covers a lot of ground, always a good sign that an author not only knows her subject back-to-front, but also can express core ideas clearly and concisely. There is a good mix of theory, practical skills, and contemporary ideas on how to develop your organization’s ability to dialogue, hence moving beyond individual learning to a more powerful form of group learning. Donnellon, A. (1996) Team Talk, Harvard Business School Press, Boston, MA. Subtitled The Power of Language in Team Dynamics, this book uses anthropological and linguistic research techniques to focus on talk as the ‘‘medium through which team work is done and through which organizational and individual forces can be observed and analyzed.’’ Given that language exchange is the primary way in which people swap information, make decisions, and formulate plans, Donnellon’s book represents the long overdue entry of sociolinguistics into the ﬁeld of management studies. Fineman, S. (ed.) (1993) Emotion in Organizations, Sage, London. This ground-breaking book brings together a number of contributions from leading academics about how people can behave in companies and why this should be so. Not the easiest of reads, but it does make the point powerfully that a person’s behavior always appears logical to that individual, no matter how irrational it might appear to others. Gardner, H. (1996) Leading Minds – An Anatomy of Leadership, HarperCollins, New York. Gardner takes a variety of well-known leaders – as diverse as Margaret Thatcher and Gandhi – and tries to tease out what it is that made them so successful. He tops and tails his book with chapters on his theoretical framework and sandwiches the biographies in the middle. Gardner demonstrates brilliantly the qualities and experience needed by ‘‘leading minds,’’ although less helpfully offers no practical guidance as to how readers might develop their own leadership skills. Handy, C. (2001) The Elephant and the Flea, Hutchinson, London. In his latest book (and his best for some time), self-styled social philosopher Handy explores the business world of the twenty-ﬁrst century, which he claims ‘‘will be a world of ﬂeas and elephants, of large conglomerates and small individual entities, of large political
and economic blocs and small countries.’’ The smart thing, it seems, is to be the ﬂea on the back of the elephant because a ﬂea can be global as easily as one of the elephants but can more easily be swept away. Elephants are a guarantee of continuity but ﬂeas provide the innovation. A fascinating premise, outlined lucidly by Handy in one of the ﬁrst ‘‘must-reads’’ of this century. » Hochschild, A.R. (1998) The Time Bind: When Work becomes Home & Home becomes Work, Metropolitan Books, New York. Hochschild, a sociology professor at the University of California, Berkeley, spent three years interviewing hundreds of employees of a Fortune 500 company renowned for its family-friendly policies, to see how they reconciled their work and their home life. Using a series of vivid portraits, the author demonstrates the relentless and increasing pressure that is being placed on many of us, from the boardroom to the shop ﬂoor, to improve performance at work, show commitment to our organizations and perform our duties as parents. Hochschild’s ground-breaking research exposes our crunch-time world and reveals how, after the ﬁrst shift at work and the second at home, comes the third, and hardest, shift of repairing the damage created by the ﬁrst two. » Jaques, E. (1996) Requisite Organization, 2nd edn, Cason Hall, Gloucester, MA. Based on Jaques’ latest research, this is a thorough revision of the original book published in 1989. Requisite Organization challenges many current assumptions about effective organizations, particularly in the ﬁeld of hierarchy – of which Jaques is a fan. Some may ﬁnd his theories indigestible, but for those who persist there is a wealth of challenging material that undermines much conventional organizational wisdom. » Kanigel, R. (1997) The One Best Way, Little Brown, New York. The One Best Way is an illuminating biography of Frederick W. Taylor, the efﬁciency expert and ‘‘the father of scientiﬁc management.’’ Although he lived through little of it – he died in 1915, aged 59 – Taylor’s inﬂuence on the twentieth century is unquestionable. Peter Drucker, for example, rates him alongside Freud and Darwin as a maker of the modern world. And despite its critics, Taylorism lives on, whether in the form of re-engineering (a direct descendant of
scientiﬁc management), the continuing debate about the de-skilling of jobs, or the global standardization of companies like McDonald’s. At 570 pages, the book is deﬁnitely top-heavy with detail. However, as an introduction to arguably the world’s ﬁrst management consultant, it makes fascinating reading. » Katzenbach, J. & Smith, D. (1993) The Wisdom of Teams, Harvard Business School Press, Boston, MA. According to Katzenbach and Smith – two senior McKinsey consultants – teams are ‘‘the primary building blocks of company performance.’’ For this book, the authors talked with hundreds of people in more than 50 teams from 30 companies in a bid to discover what differentiates various levels of team performance, where and how teams work best, and how generally to enhance team effectiveness. Some of their ﬁndings are common sense – e.g. teams with a genuine commitment to performance goals and to a common purpose outperform those who place a greater emphasis on teambuilding. Others are, at face value, surprising (formal hierarchy, they say, is actually good for teams). In a chapter towards the end of the book they describe how top management can usefully support the development of a team-based culture. » Lipnack, J. & Stamps, J. (1997) Virtual teams, John Wiley & Sons, New York. According to Lipnack and Stamps, advances in communication technologies are having a dramatic impact on the nature of teamwork. Traditional, collocated teams are giving way to distributed, cross-boundary, virtual groups linked by technology and reaching across space, time, and organizational boundaries. Drawing on the experience of organizations like Hewlett-Packard and Motorola, they set out the factors that underpin successful virtual team performance, while at the same time warning that misunderstandings are more likely with virtual teams compared to their face-to-face counterparts and that more things are likely to go wrong. » Maslow, A. (1998) Maslow on Management, John Wiley & Sons, New York. Abraham Maslow remains one of the most widely known experts on human behavior and motivation. His psychological perspectives on management, such as the hierarchy of needs, are still studied today
Eupsychian Management. New York. The Drama of Leadership is an insightful and passionate appeal to rethink the type of people that organizations will need at the helm
. New York. & Waterman. but during the mid-1980s.’’ Pink deﬁnes free agents as ‘‘free from the bonds of a large institution. has been updated to include commentaries by some of today’s management thinkers. (1997) The Drama of Leadership. 37 years after its original publication. Pitcher P. New York. Warner Books.94
in business schools all over the world. R. (1996) The Death of Competition. the new archetypes of work in America. One of the ﬁrst and arguably the best exploration of leadership and strategy in a future that Moore envisions will be characterized by organized chaos. Moore. Peters. .’’ A classic in the making. New York. J. T. D. Pink. Exploding a number of popular myths about leaders on the way. Notions of embracing a paradoxical world of constant change. He highlights the shift from ‘‘organization man’’ to ‘‘free agent worker. and agents of their own futures . Warner Books. Business as ecosystem – Moore explores the biological metaphor in great detail and with considerable insight. Tom Peters and co-author Bob Waterman changed the way organizations thought about themselves. the challenge laid down by Peters and Waterman was enormous. of providing exemplary customer service. (2001) Free Agent Nation: How America’s New Independent Workers Are Transforming The Way We Live. Maslow on Management is a stimulating but not always easy read that demonstrates clearly why Maslow was an unparalleled thinker and innovator in applying human behavior to the workplace. who discuss the continuing relevance of his ideas. when at the peak of their fame. John Wiley & Sons. Maslow’s most inﬂuential business book. With the publication of In Search of Excellence some two decades ago. and of the need for high-speed response are now mainstream corporate thinking. HarperCollins.F. Daniel Pink looks at the seismic changes occurring in the American workforce. (1982) In Search of Excellence. . Now.
» People do what they perceive is in their best interest. but wilt under negative stress. London. Actions do speak louder than words. Orion Books. and call their public appearances gigs rather than seminars. a reliance on people as the main source of ‘‘sustainable uniqueness. Financial Times/Prentice Hall. in fact. reinforced with excellent examples. M. describe themselves as funksters. it’s normal for Swedish business professors to shave their heads. » People are not inherently anti-change. constant change and. means innovation. (1997) Why Change Doesn’t Work. London. and authors Ridderstr˚le and Nordstr¨ m are not a o your standard issue academics. & Nordstr¨ m. Funky management. Most will. Unless. and then inhabit this vision until it comes true. K. especially. wear leather trousers. » People thrive under creative challenge. » The way to make effective long-term change is to ﬁrst visualize what you want to accomplish. Relatively light on practical guidance though. J. ˚ » Ridderstrale. thinking as rationally as circumstances allow them to think. the most neglected aspect of the whole change process is the human factor. But Funky Business is no dry theoretical tome.’’ This book draws extensively from rigorously researched data but presents its ﬁndings with wit and intelligence. No single ‘‘elegant solution’’ will address the entire breadth of these differences. embrace initiatives provided the change has positive meaning for them. » People are different. for Nordstr¨ m and o Ridderstr˚le. According to Robbins and Finley. » Robbins. (2000) Funky Business: Talent o Makes Capital Dance. and a history of previous deception octuples present suspicion. that is. On the face of it.’’ Five of the seven rules feature people as the ﬁrst word with the remaining two highlighting vision and imagination. » People believe what they see. & Finley. H. a business book by two Swedish professors about how successful companies differ from their competitors doesn’t sound like the most riveting of reads.RESOURCES
in the twenty-ﬁrst century. This is clear from their ‘‘seven unchangeable rules of change.
It clariﬁes the concept of process consultation as deﬁned in the previous. (1990) The Fifth Discipline. tactics and style. » Schwartz. UK. & Gibb. is one which initially gains people’s attention and starts them thinking. » Senge. intervention strategy. Senge’s book was one of the ﬁrst to popularize the concept of the learning organization. and Royal Dutch/Shell. no important change can occur. they believe. and one that should be read by anybody who would like their thinking about organizational change reinvigorated. Nike. and emerging issues in process consultation. (1999) When Good Companies Do Bad Things. (1987) Process Consultation – Volume 2. P. one that ﬁzzes with ideas and insights. New York.96
» Change is an act of the imagination. the authors discuss business ethics at companies such as Nestle. B. and introduces modiﬁcations and new ideas that elaborate on and have evolved beyond the material in the ﬁrst volume. John Wiley & Sons. Texaco. Process Consultation: Its Role in Organization Development (1969). One of the persistent dilemmas that faces any manager is when to help others ﬁgure out a solution by using facilitation skills and when to explicitly give advice or tell others what to do. New York. This is an exceptionally stimulating book. outlines the beneﬁts of process consultation – Schein’s facilitation model – as a viable means of getting things done. E. His ﬁve core disciplines that underpin
. This book. » Schein. Included are such topics as initiating and managing change. The optimal approach to managing change. and which subsequently leverages people’s knowledge and creativity to achieve successful and sustainable change. They examine incidents involving each of these companies. and suggest alternative approaches to the actual damage control methods adopted by the organizations in question when they were faced with (often highly public) challenges to their reputations. In When Good Companies Do Bad Things. Volume 2 is a valuable and reasonably practical resource for anyone involved in the management of people. AddisonWesley. intended for relatively experienced consultants and managers. Chichester. Business Books.H. Until the imagination is engaged. more theoretical volume. Union Carbide. P.
» Simmons. This book has proved itself in the market place as the deﬁnitive guide to understanding and managing intangible assets. Amacom. and theory of the signiﬁcance of intellectual capital (deﬁned by Stewart as ‘‘packaged useful knowledge’’) which is a delight to read. and offer step-by-step guidance to applying the model to real work situations. New York. and produce the results needed by their organizations. practical guide. team learning. The last of these. New York. and to suggest a set of strategies by which the impact of territorial games can be defused. The chapter on change will give many readers insightful ‘‘a-has’’ of recognition as they reﬂect on
. R. (1998) Territorial Games. (1997) Managers as Facilitators. The author provides a framework. Managers as Facilitators is an excellent source of ideas to use as a team develops and changes. J. » Stewart. This is a fascinating exploration of organizational turf wars – why they occur and what we can do about them. this book is a heavyweight which explains why intellectual capital will be the foundation of corporate success in the new century. one must recognize and use the four key elements of the facilitation model: task. a core skill in a globalized. (1997) Intellectual Capital: The New Wealth of Organizations. and process. successful managers must use facilitation skills to help people exercise the freedom to make decisions. self. She then goes on to examine what can be done to end turf wars at work. & Farrell. A. They explore each element in detail. » Weaver. T. shared vision. Simmons identiﬁes and describes ten different territorial games that are enacted within organizations (see Chapter 6). They say that to become a successful facilitator. networked economy. Bantam Books.’’ is covered in 70 pages in a section that represents an excellent generalist introduction to the main concepts of systems thinking. mental models (the ﬁlters through which we view the world).A. Berrett Koehler. which Senge terms the ‘‘cornerstone discipline.RESOURCES
the building of a learning community are personal mastery. work together more effectively. In an age of lightweight books on the new information age. and systems thinking. respond quickly to customers. According to Weaver and Farrell. New York. group.
Fall.’’ Sloan Management Review.98
organizational changes they have experienced. & von Oetinger. Gibbs.S. (2001) ‘‘Land of the free. Now. (2001) ‘‘Creativity vs structure: A useful tension. » Hansen. (2001) ‘‘Introducing T-shaped managers: Knowledge management’s next generation. The authors put forward something they call T-shaped management.’’ Fast Company. » Webber. May. Summer. Examine their performance over 40 years.’’ Harvard Business Review.T. M.’’ Sloan Management Review. (2001) ‘‘Swarm intelligence: A whole new way to think about business. A.M. » Fulmer. P. » Anon (2001) ‘‘Good to great. The ﬁrst rule of life is also the ﬁrst rule of business: Adapt or die. D. R. » Bonabeau. & Meyer. Find the 11 companies that became great. then try running it like a living organism.
.. (2000) ‘‘Developing leaders: How winning companies keep on winning. & Goldsmith. Most companies do a poor job of capitalizing on the wealth of expertise scattered across their organizations. M. If you want your company to stay alive. and a Quick Fix section offers excellent clues to solving everyday management problems. while remaining committed to their individual business unit’s performance (the vertical part). May. April. J.’’ Fast Company. October.H. which requires executives to share knowledge freely across their organization (the horizontal part of the ‘‘T’’).’’ Fast Company. B. most recent ﬁrst. » Pink. Start with 1435 good companies. (2001) ‘‘How business is a lot like life. C.M. E. P. & Duguid. Real-world examples make the book accessible as well as practical. ARTICLES These are listed in date order. Great new ideas help only those organizations with the discipline and infrastructure needed to implement them. » Brown. March.’’ Harvard Business Review. here’s how you can do it too.A.
» Mintzberg, H. & van der Heyden, L. (1999) ‘‘Organigraphs: Drawing how companies really work,’’ Harvard Business Review, September–October. » Nicholson, N. (1998) ‘‘How hardwired is human behavior,’’ Harvard Business Review, July–August. Evolutionary psychology asserts that human beings today retain the mentality of our Stone Age ancestors. We are, in other words, ‘‘hardwired’’ for certain attitudes and behaviors. If that is so, what are the implications for managers? » Anon (1997) ‘‘Of soloists and session men,’’ Economist, 22 February. An exploration of the balance between individuality and fraternity among jazz musicians. » Heifetz, R.A. & Laurie, D.L. (1997) ‘‘The work of leadership,’’ Harvard Business Review, January–February. For Heifetz and Laurie, leadership occurs only when those in responsible roles make happen what wouldn’t have happened anyway. The authors call this adaptive work, in contrast to technical work, in which executives draw upon a repertoire of pre-existing solutions to address the problems at hand. They also divorce leadership from personality traits. » Collins, J.C. & Porras, J.I. (1996) ‘‘Building your company’s vision,’’ Harvard Business Review, September–October. » Kotter, J.P. (1995) ‘‘Leading change: Why transformation efforts fail,’’ Harvard Business Review, March–April. » Anon (1997) ‘‘The vision thing,’’ Economist, 25 September. » Stayer, R. (1990) ‘‘How I learned to let my workers lead,’’ Harvard Business Review, November–December. JOURNALS, MAGAZINES, AND WEBSITES For readers wanting to keep up to date with developments in the strategy ﬁeld, the following list of publications and Websites are worth dipping into on a regular basis: Center for Business Innovation A site managed by consultants Ernst and Young – the quality of the content varies but occasionally provokes thought. www.businessinnovation.ey.com
The Economist The best single source of information about what is happening in the world. A mainstream publication but one that will take on some big topics from time to time, and one whose take on the new economy is variably insightful and clear-eyed. www.economist.com Fast Company The magazine is monthly and has been an essential read since it started up in 1996. Of late though, the content – whilst still excellent – has been swamped by increasing volumes of advertising. The companion Website is just about the best free site around on the future world of work (it also carries material not found in the magazine). www.fastcompany.com/home.html Financial Times Of all the dailies, the Financial Times provides the best in-depth coverage of organization-related issues www.ft.com Harvard Business Review The most authoritative business monthly on the block. Has tended in the past to be more mainstream than truly groundbreaking in its coverage of business issues. That said, HBR has responded well to the challenge to traditional business thinking posed by the new economy, and recent issues have generally contained two or three relevant articles. Also, if you are interested in getting the lowdown on forthcoming books from Harvard’s publishing wing several months before publication, the magazine consistently trails major books with articles from the authors. The Website provides overview of contents of the magazine – no free articles but the executive summaries are there and they are often all you need. www.hbsp.harvard.edu/home.html The Leadership and Organization Development Journal The Leadership & Organization Development Journal aims to provide penetrating insights into the expected qualities of leaders in the current
climate. It presents research and views on making and developing dynamic leaders, how organizations can and will change, and how leaders can effect this. Contains some excellent links to free articles and information. www.emeraldinsight.com/lodj.htm Management Link A one-stop shop containing links to more than 100 key management Websites. www.inst.mgt.org.uk/external/mgt-link People Management The online magazine of the Chartered Institute of Personnel and Development. www.peoplemanagement.co.uk Sloan Management Review Since its founding in 1959, MIT’s Sloan Management Review has covered all management disciplines, although its particular emphasis these days is on corporate strategy, leadership, and management of technology and innovation. Over the years it has featured articles by the likes of Peter Senge, Lester Thurow, James Brian Quinn, Gary Hamel, Thomas Davenport, Christopher Bartlett, Sumantra Ghoshal, John Quelch, Henry Mintzberg, Max Bazerman, and Ed Lawler. mitsloan.mit.edu (note no www) Edschein.com This site is dedicated to the life and work of Edgar Schein, widely acclaimed as one of the founders of the ﬁeld of organizational psychology. www.edschein.com HR Network This Website contains some excellent material about team development. It describes seven characteristics, depicted by the acronym PERFORM, that are necessary for a group to become a high performing team. The characteristics are Purpose and values; Empowerment;
. Flexibility: Optimal productivity. Recognition and appreciation. and Morale.102
Relationships and communication. www.hrnetwork. www.uk Imaginiz This site is dedicated to the work and thinking of Gareth Morgan.
Managing conﬂict. Emotional intelligence. Address the issues.10.10
07. Decision-making.Ten Steps to Making it Work
» » » » » » » » » » Leadership. Change your organizational lenses. The power of teams. not the culture. Managing intellectual capital. Innovation. Managing external consultants.
namely that people behave the way they are treated: expect your team to fail and – sure enough – that’s what will happen. So recognize the following as a set of generalized principles that will serve most organizations well most of the time. LEADERSHIP
Excellent leaders understand the Pygmalion Effect. there may be other points not covered.
. treat them as competent. not the culture Managing intellectual capital Change your organizational lenses.’’1 Noam Chomsky The following ten points don’t attempt to represent absolutely the major priorities for your organization right now.104
‘‘Optimism is a strategy for making a better future. there’s a chance you may contribute to making a better world. that there are opportunities to change things.
Let’s take each in turn. These are the ten points: 1 2 3 4 5 6 7 8 9 10 Leadership Decision making The power of teams Managing conﬂict Innovation Emotional intelligence Managing external consultants Address the issues. 1. If you assume that there is an instinct for freedom. it’s unlikely you will step up and take responsibility for making it so. If you assume that there is no hope. you guarantee that there will be no hope. Some of the points may be irrelevant to your organization and its marketplace. talented individuals and they’ll live up to your expectations. Because unless you believe that the future can be better.
Kennedy. Hitler (not all effective leaders are necessarily ‘‘good’’). Gandhi.’’2 Gardner emphasizes the ability of leaders to tell or embody stories that speak to other people and describes a continuum of leadership that starts with indirect leadership. Mother Teresa. although groups sometimes identify spiritual ﬁgures such as Jesus. and
. and others who epitomize this will to act. Groups often identify powerful political and military ﬁgures such as Churchill. ignites the passion for change within. Genghis Khan. We do not fully understand leadership. thoughts. others that they are far more attuned than others to the zeitgeist. their ability to put their own stamp on things enables them to become masters of. Julius Caesar. Howard Gardner. one which focuses on maintaining relationships among group members. that what you have to do is build a new model that makes the existing model obsolete. the spirit of the times. a leading authority on leadership. and The Buddha among their list of great leaders. markedly inﬂuence the behaviors. allowing the leader to sustain the people involved in the process of creating a shared vision for the organization. In a world of work where the rules of the game are being re-shaped before our eyes. There is another equally important aspect of leadership. Alexander the Great. It is the element of leadership that is widely recognized when researchers ask groups to name great leaders. John F. and not victims of. The leader carries the torch for the organization. argues that leaders are all those who ‘‘by word and/or personal example. Nevertheless this aspect is fundamental to effective leadership. Martin Luther King. and acts as a catalyst for that change. Margaret Thatcher. Leadership lies at the heart of successful change.TEN STEPS TO MAKING IT WORK
They also intuitively understand Buckminster Fuller’s axiom that you never change things by ﬁghting the existing reality. He or she is the ultimate custodian of the organizational vision. exerted through written work or other symbolic communication. as it embodies the will to act within an organization. Leadership is sometimes referred to as the temple of intentionality. and/or feelings of a signiﬁcant number of their fellow human beings. Some writers argue that leaders truly create the future. circumstance. This is often not recognized at ﬁrst.
and it always occurs outside one’s comfort zone. the distinction between technical work and adaptive work is not difﬁcult to comprehend. For our purpose. however. Technical work is nothing to be ashamed of but it does not require leadership. we need only make one ﬁnal observation. The following key points are adapted from a letter by Pascale that appeared in the Harvard Business Review. He is now an associate Fellow of Oxford University. with ‘‘leadership’’ being so fashionable these days.’’
For 20 years. boldness. Charisma. At the heart of leadership there lies a paradox. ‘‘We did it ourselves. Adaptive work is in contrast to technical work. There is a great more that could be said about leadership.106
progresses to direct leadership of the sort exercised by world leaders through speeches and other means. The trouble is.3 He wrote in response to an article by Ronald Heifetz and Donald Laurie on leadership that was published in the January–February 1997 issue. » Leadership occurs only when those in responsible roles consciously endeavor to make happen what wouldn’t happen anyway. » The authors’ second radical idea is to divorce leadership from personality traits. » At face value. The great leader is he who the people say. consultant and writer Richard Pascale was on the faculty of the Stanford Business School. Heifetz and Laurie call this adaptive work. The good leader is he who people revere. The idea that most people who occupy executive positions are merely stewards of the inevitable is provocative. which was captured succinctly by Lao Tsu: The wicked leader is he who people despise. many executives don’t like to think that they are merely making happen what was going to happen anyway. even the capacity to
. in which executives draw upon a repertoire of pre-existing solutions to address the problems at hand.
One way to make progress on a tough decision is to agree on what the question is. 88% of management admit to using gut feel over and above hard facts up to 75% of the time. Conﬂict is good for an organization – as long as it’s resolved quickly. Agree on the wording and write it down.
2. Decision Making Survey 1997. If you’re not going to do anything differently tomorrow by making a decision today. Situations change. and 62% say that they do not get the right amount of information to make a decision. That’s not an excuse to procrastinate. 91% admit that they do not get enough thinking time. published by Business Objects
Decision-making has been deﬁned as the ability to decide on a course of action after due reﬂection. Debate often stems from having different ideas about what’s being decided. Instead. the central theme shining through their work is mindfulness. But the best decisions are just-in-time decisions. They highlight the capacity to discern when traditional solutions are not likely to produce the desired results.TEN STEPS TO MAKING IT WORK
generate organizational purpose are absent from their model. then don’t make it today. An article in Fast Company magazine4 suggests four steps to making smarter decisions: 1 Wait until the last minute – but not a minute later.
. 2 Don’t be afraid to argue. DECISION-MAKING
When making business decisions. markets shift. Real leaders deal with conﬂict head-on. That discernment must be followed not by the exercise of personality traits or hard-to-acquire skills but by the discipline necessary to enroll the organization in seeking new solutions. Making good quality decisions enables us to show that we can make a positive difference. that we are not merely intent on maintaining the status quo.
» The sunk-cost trap: this inclines us to perpetuate the mistakes of the past. undermining the entire decision-making process.
. Not everyone gets a chance to decide. So pick one of the eight and get going. dramatic events. Here are eight psychological traps that are particularly likely to affect the way people make business decisions. you should not be able to tell who was for it and who was against it. eight of them will probably work. but everyone should have a chance to be heard. » The framing trap: this occurs when we misstate a problem. the right information was not collected. People can spend months debating the ‘‘best’’ decision without actually arriving at any decision. Without a doubt. For example. not the best decision. » The recallability trap: this leads us to give undue weight to recent. perhaps the alternatives were not clearly deﬁned. the most vigorous debates yield the best thinking. » The overconﬁdence trap: this makes us overestimate the accuracy of our forecasts. » The prudence trap: this leads us to be overcautious when we make estimates about uncertain events. But sometimes the fault lies not in the decision-making process but rather in the mind of the decision-maker. A Harvard Business School article5 maintains that bad decisions can often be traced back to the way the decisions were made. But once a decision is made. Every decision involves risk. And if there are ten ways to do something. » The status-quo trap: this biases us toward maintaining the current situation – even when better alternatives exist.108
3 Make the right decision. » The anchoring trap: this leads us to give disproportionate weight to the ﬁrst information we receive. » The conﬁrming-evidence trap: this leads us to seek out information supporting an existing predilection and to discount opposing information. the costs and beneﬁts were not accurately weighed. 4 Disagree – and then commit.
If nothing else. Others are at face value surprising (formal hierarchy.g. Some of their ﬁndings are common sense – e.’’
. he believes. where and how teams work best. Katzenbach has moved his focus up the organizational ladder. but that moving from independence to interdependence is a sign of maturity. namely that: » » » » teamwork at the top will lead to team performance. There was a story in the papers in the late 1990s concerning one of the main Whitehall departments that used to run a course called ‘‘Getting the most out of your junior staff. this anecdote serves to demonstrate how potent the concept of ‘‘team’’ has become in recent times. the senior group should function as a team whenever it is together. top teams need to spend more time together building consensus.’’ For a book they wrote.TEN STEPS TO MAKING IT WORK
3. needless to say. and » teams at the top need to ‘‘set the example. fundamentally mistaken and has generated ﬁve myths about teamwork at the top. More recently.’’ The content. they say. teams with a genuine commitment to performance goals and to a common purpose outperform those who place a greater emphasis on teambuilding.6 the two of them talked with hundreds of people in more than 50 teams from 30 companies in a bid to discover what differentiates various levels of team performance. The widely held view that teamwork is a sine qua non of organizational success is. was identical. is actually good for teams). He believes that the best corporate leaders are those who actively shift in and out of team mode behind closed doors.’’ One of the juniors objected to the title and as a consequence the course was renamed ‘‘Succeeding with teams. According to Jon Katzenbach and Douglas Smith – two senior McKinsey consultants – teams are ‘‘the primary building blocks of company performance. THE POWER OF TEAMS Working collaboratively is far more likely to deliver good results than working competitively. Somebody once wrote that moving from dependence to independence is a sign of growing up. and how generally to enhance team effectiveness. CEOs must change their personal style to obtain team performance.
1 Assemble a team with diverse ages. MANAGING CONFLICT According to a Harvard Business Review article. While at General Electric (GE). Jack Welch was known as an advocate of what he called ‘‘constructive contention. backgrounds and industry experience. When it comes to assessing the contribution that his staff make to the business. 4 Apply multiple perspectives – role playing.’’ he has said.7 constructive conﬂict can actually enhance team performance and in turn achieve better decision-making. 5. Ensure that consensus is real and not just an indication of disengagement. willing to experiment. and so discourage ‘‘turf war’’ thinking. writers like Richard Pascale have lent their support to the view that conﬂict can be the fuel of transformation. the pursuit of ideas is the only thing that matters. success will inevitably go to people who are naturally curious. Assuming that what works today will work tomorrow is a recipe for the scrapheap. It is best achieved in
. ‘‘You can always ﬁnd capable people to do almost anything else. 4. is unequivocal: ‘‘To me. 5 Actively and overtly manage conﬂict. 2 Meet frequently to build familiarity and mutual conﬁdence. passionate about their work. Michael Eisner. successful innovation requires a conscious and explicit commitment and inevitably involves risk. This can enable a fresh view of the problem.’’ Elsewhere. and revolutionary in their thinking. head of the Disney Corporation. 3 Encourage team members to assume roles outside of their obvious functional responsibilities. INNOVATION In a working world that grows ever more unpredictable.’’ For a company. putting yourself in the competitor’s shoes.110
He maintains that the challenge for executives is to see through these myths and recognize when a team effort is needed and when a working group under single leadership is the more effective route to follow. The article suggests ﬁve ways to achieve this. etc.
little hierarchy or bureaucracy. » Motivation: using our deepest preferences to move and guide us toward our goals. the free ﬂow of information. and question all the time. ‘‘What does it mean?’’ ‘‘Why?’’ ‘‘What if?’’ and ‘‘How else could I do this?’’ » Important questions are: ‘‘Why does my organization exist?’’ ‘‘Why do we do things and have they any worthwhile purpose?’’ ‘‘What would we do differently if we started off again from scratch?’’ ‘‘Why don’t we make the best use of our core competencies?’’ ‘‘Why don’t we make it as easy as possible for our people to satisfy our customers?’’ 6. academic intelligence. the main popularizer of the concept. An innovative organization is typically characterized by informality. for motivating ourselves. and for managing emotions in ourselves and in our relationships. According to Daniel Goleman. easier to build effective team relationships. and creative interaction within small cross-functional teams and small business units. Ask yourself. » Continually challenge conventional wisdom. and cultivating rapport with a broad range of people.
. being able to take their perspective. Here are a few tips that will help to hone your capability in this area. » Self-awareness: knowing what we are feeling in the moment and using those preferences to guide our decision-making. EMOTIONAL INTELLIGENCE Emotional intelligence refers to the capacity for recognizing our own feelings and those of others. but complementary to. » Empathy: sensing what others are feeling. emotional intelligence embraces ﬁve emotional and social competencies. The emotionally intelligent manager ﬁnds it easier to network than their emotionally unintelligent peers.TEN STEPS TO MAKING IT WORK
a ‘‘no blame’’ culture which recognizes that mistakes and failures are the natural and inevitable bedfellows of successful ideas. It describes abilities distinct from. » Self-regulation: handling our emotions so that they facilitate rather than interfere with the task in hand. and easier to acknowledge and deal with constructive criticism of their performance.
» If you hire a consulting company. and not an army of their latest graduate intake. Be tight with your money. don’t make the call. negotiate and settle disputes.112
» Social Skills: handling emotions in relationships well and accurately reading social situations and networks. The more clearly the goal is deﬁned. Make it a part of the contract. Base payments on performance and on your satisfaction. » What will it cost? (And how long will it take?) Avoid open-ended arrangements and vague promises. Self-interest rules. particularly against a background of more and more activities being outsourced. If you don’t know what you want to do. Here are some guidelines on how best to manage consultants. the ability to make best and most cost-effective use of consultants becomes crucial. tested expertise. Where people are not being emotionally intelligent. 7.8 » Why are you doing this? Before you sit down to talk to a consulting ﬁrm. Maybe you don’t need an army of consultants. what you can see most commonly are individuals obsessively pursuing their own agendas. etc. demand that they personally pay good and frequent attention to your needs.
. interacting smoothly. or if they display a special. » Having determined the goal. In many organizations. using these skills to persuade. If you know the reputations of the partners. organizations are bringing in external consultants in ever increasing numbers. derived from Dangerous Company by James O’Shea and Charles Madigan. make certain that is what shows up. including the dark parts about what happens if the consulting engagement doesn’t work. who will they send? Be ruthless in this part of the process. lead. emotional intelligence is most noticeable by its absence. If they are promising the best. Don’t forget to assess the brilliance within your own company before you go trying to buy some from outside. ask yourself whether you really need outsiders to help you reach it. MANAGING EXTERNAL CONSULTANTS These days. the greater the chance of reaching it. it would help to have some idea of what it is you want to achieve. Go instead for speciﬁcity in contracts. This being so.
. » Value your employees. 8. Insist on tailor-made consulting engagements that recognize the unique nature of your business.9 1 Start with what the ‘‘business problem’’ is. but more e than an afterthought. How they feel about the outsiders has a lot to do with whether the engagement will work. they complement them. The best consulting engagements do not take over your operations. your staff will be on board. Don’t be afraid to trim elegant proposals right down to their essence. a professor at the MIT Sloan School of Management. it is about the organization’s reason to be at all. The organization must understand its mission or its primary task. This is a great clich´. » Beware of glib talkers with books. Make certain you have your own internal measure of how a procedure is progressing. but you do. confront it immediately and demand repairs. and understand that for the duration of the contract. don’t try to ﬁx it. The fact that someone can stack up case after case in which a practice seemed to work is no guarantee it will work for you. Long after the consultants leave. proposes the following set of steps. Consultants don’t answer to boards of directors. The best consulting companies know this and will go to great lengths to avoid morale problems. and they generally try to make this a part of the process. It is in the consulting company’s interest to ﬁnd trouble where you see calm waters. NOT THE CULTURE What then can a company do if current cultural assumptions appear to be dysfunctional or out of alignment with environmental realities? Edgar Schein. If you sense something is going wrong. ADDRESS THE ISSUES.TEN STEPS TO MAKING IT WORK
» Never give up control. they are responsible and in charge. » If it’s not broke. Make certain your own people retain control over everything. » Measure the process. share in decisionmaking. This issue is not about culture. and probably the world’s foremost authority on organizational culture. Consulting companies do. One of the most common complaints about consultants is that they talk down to the locals or ignore their ideas. » Consultants can shower down all kinds of havoc on a company.
2 Figure out what needs to be done strategically and tactically to solve the business problem 3 When there is clear consensus on what needs to be done. Human capital is formed and deployed. ‘‘when more of the time and talent of the people who work in a company is devoted to
. it could be found in the corporate balance sheets. 8 Ultimately the structures and routine processes of the organization must also be brought into alignment with the desired new directions. intangible form of asset: intellectual capital. many task forces and change teams. 4 Focus on those cultural elements that will help you get to where you need to go. MANAGING INTELLECTUAL CAPITAL Time was when capital could be viewed in purely ﬁnancial or physical terms – it showed up in the buildings and equipment owned. It is far easier to build up the strengths of the culture than to change those elements that are dysfunctional or weak. 7 Adjust the reward. » Human capital: the knowledge that resides within the heads of employees that is relevant to the purpose of the organization. examine the existing culture to ﬁnd out how present tacit assumptions would aid or hinder what needs to be done. the search has been on for an altogether more elusive. In recent years. and control systems to be aligned with the new desired strategy. though. Schein warns that all of this takes a great deal of time and energy on the part of many layers of management. 5 Identify the culture carriers who see the new direction and feel comfortable moving in that direction. 9. But the prerequisite for success is seeing a clear solution to a clear business problem. Empower speciﬁc employees and managers whose assumptions are already in line with the new strategy. Intellectual capital (deﬁned by Thomas Stewart in his book Intellectual Capital10 as ‘‘packaged useful knowledge’’) can be broken down into three areas. 6 Build change teams around the new culture carriers. incentive. writes Stewart.
Stewart’s belief is that ‘‘customer capital is probably – and startlingly when you think about it – the worst managed of all intangible assets.’’ Structural capital ‘‘belongs to the organization as a whole. Stewart calls this ‘‘knowledge that doesn’t go home at night. and business processes. Many businesses don’t even know who their customers are.’’ Examples of structural capital include technologies.
. Understanding what intellectual capital amounts to is only part of the story for organizations. a company needs to foster teamwork.TEN STEPS TO MAKING IT WORK
activities that result in innovation. To this end.’’ Human capital can grow in two ways: ‘‘when the organization uses more of what people know.’’ » Structural capital: the knowledge retained within the organization that becomes company property. and other social forms of learning. The real value comes in being able to capture and deploy it. Stewart offers the following 10 principles for managing intellectual capital. » To create human capital it can use.’’ Unleashing the human capital resident in the organization requires ‘‘minimizing mindless tasks.’’ » Customer capital: the value of a company’s ongoing relationships with the people or organizations to which it sells. and when people know more stuff that is useful to the organization. unproductive inﬁghting. Others are costs to be minimized. » Organizational wealth is created around skills and talents that are proprietary and scarce. » Structural assets (those intangible assets the company owns) are the easiest to manage but those that customers care least about. and proﬁt per customer. To manage and develop human capital companies must recognize unsentimentally that people with these talents are assets to invest in. It can be reproduced and shared. Only by recognizing the shared nature of these assets can a company manage and proﬁt from these assets. inventions. communities of practice. publications. Indicators of customer capital include market share. meaningless paperwork. » Companies don’t own human and customer capital. customer retention and defection rates.
as a brain. the richer and deeper your understanding of how it works and what might be undermining its performance. 2 Gardner. Each of these metaphors provides a distinctive ﬁlter through which certain facets of the organization become more apparent. about viewing the organization as a machine. They can support each other or detract from each other. » Human. 4 In Fast Company. Gareth Morgan suggests in his book Images of Organization. » Information and knowledge can and should substitute for expensive physical and ﬁnancial assets. and customers separately. 3 Letter by Richard Pascale. » Focus on the ﬂow of information. January 1998. New York.11 that the use of metaphor is a form of organization analysis that can enrich appreciation. Harper Collins. However. NOTES 1 Chomsky. not the ﬂow of materials. He talks. H. N. October 1998. for example.
» Move from amassing knowledge just-in-case to having information that customers need ready-to-hand. and so their value is bound to be limited. in an interview for Wired. It is not enough to invest in people. The use of metaphors enables a way of thinking about organizations that can be quite releasing for mangers used to viewing the organization in a certain way. 10. and that which they might need within reasonable reach. » Knowledge work is custom work. and customer capital work together. as an organism. structural. » Every company should re-analyze the value chain of the industry that it participates in to see what information is most crucial. Morgan also takes pains to remind us that metaphors are not the experiences themselves. or as a political system. Harvard Business Review. June–July 1997. CHANGE YOUR ORGANIZATIONAL LENSES The more choices you have about you look at your organization. (1996) Leading Minds: An Anatomy of Leadership. systems.
London. 8 O’Shea. Harvard Business School Press. 7 Eisenhardt. (1998) ‘‘The hidden traps in decision-making. September– October. 6 Katzenbach. E. 11 Morgan. 10 Stewart. Boston. & Madigan.’’ Harvard Business Review. J.’ Harvard Business Review. D. H. & Smith.TEN STEPS TO MAKING IT WORK
5 Hammond. & Raiffa. MA. New York. (1996) ‘‘Culture matters. J. K. T. (1999) Dangerous Company. (1993) The Wisdom of Teams. J. G. (1997) Intellectual Capital. (1986) Image of Organization. & Bourgeois. Kahwajy. Sage.’’ Demos Quarterly 8.
.. Doubleday. July–August.L. Keeney. III (1997) ‘How management teams can have a good ﬁght. C.S. 9 Schein.. Nicholas Brealey. R.J. London. J. L.
in their book Organizational Behavior and Management. sociology. values. and performance of organizations. and performance within an organizational setting.Frequently Asked Questions (FAQs)
Q1: What is an organization? A: There are numerous deﬁnitions. while others focus on concepts like community and beliefs. functioning. some emphasize efﬁciency. Q2: What is organizational behavior? A: Many people – both theorists and practitioners – have offered their deﬁnitions of the term. See Chapter 2. methods. learning capabilities. A succinct deﬁnition of OB is that it is concerned with ‘‘the study of the structure. and cultural anthropology to learn about individual perception. Some stress co-ordination of resources.’’ A broader deﬁnition is offered by John Ivancevich and Michael Matteson. drawing on theory. They say that OB is about ‘‘the study of human behavior. and principles from such disciplines as psychology. Perhaps the most complete deﬁnition is that an organization is a social arrangement for achieving controlled performance in the pursuit of collective goals. and the behavior of groups and individuals within them. and actions while working with groups and within
’’ See Chapter 2. see Chapter 7. Jon Katzenbach (teams). no matter what its size. except in relation to what the organization is trying to achieve. Often success is more about clarity of thinking and commitment than anything else. location or industry sector. More recently. Most notably. and Geert Hofstede (culture). decision-making processes. globalization is intensifying levels of competition in many ﬁelds. old or new. 6 and 8. analyzing the external environment’s effect on the organization and its human resources. Organizations large or small. have offered some interesting observations from a practitioner’s perspective. See Chapter 3. Q5: Is there such a thing as an ideal set of organizational behaviors? A: Absolutely not. people like Ricardo Semler of Semco and Andy Law. It is totally appropriate that different organizations will have different values. and so on. In 1962. objectives and strategies. OB became a recognized subject area taught at Harvard Business School.120
the total organization. Gareth Morgan (metaphors). There is no right or wrong set of behaviors. Q3: What are the origins of organizational behavior? A: Although the range of issues embraced by organizational behavior has been around as long as organizations themselves have existed. See Chapter 5. and in 1970 the ﬁrst academic Chairs in Organizational Behavior were appointed. It is generally thought that the term was ﬁrst coined by Fritz Roethlisberger in the late 1950s. See Chapters 2. operating patterns. missions. Four who have been particularly inﬂuential over the past 20 years have been Peter Senge (the learning organization and systems thinking). Q4: Who are the key ﬁgures in organizational behavior? A: They are literally too numerous to mention. OB itself is a relatively young discipline. Q6: How does globalization impact on organizational behavior? A: There are several implications for an organization. can be highly successful as long as they are tuned into the best practices that apply in their arena of activity.
. Chairman at St Luke’s advertising agency. For some examples of successful organizations.
Q9: How valuable are case studies on organizations that have successfully changed the way they operate? A: Case studies very rarely produce solutions that can be transplanted wholesale into a different company.FAQS
Q7: And what about the impact of new technology? A: New technology has transformed the working practices of many organizations and has enabled a whole new body of organizational practices to come into being. See Chapter 3. Charles Handy has plausibly described a future of ‘‘elephants’’ and ‘‘ﬂeas’’ – very large corporations on the one hand. The trick is to distinguish the useful from the irrelevant or derivative. For some recommendations. supported and serviced by external ‘‘ﬂeas. perhaps comprising only one person. Q8: So where are organizations heading in the future? A: Progressive. see Chapter 9.’’ small companies. Nonetheless. Q10: How can I ﬁnd out more? A: The problem is not accessing information about organizational behavior – there are literally thousands of books and articles around. they will always throw up questions and may often suggest a way forward.
. See Chapter 4. future-oriented organizations are always on the lookout for appropriate tools and lenses for improving future competitiveness. See Chapter 6. There will also be signiﬁcant opportunities for companies of any size that can harness the potential of new and developing technology. who will offer their expertise on a ﬂexible basis.